BANKING MADE EASY

HAND BOOK ON
Confirmation Test of Probationary Officers
( Version 1.0- June 2016 )

COMPILED BY
Sanjay Kumar Trivedy (Divisional Manager )
Canara Bank, Government Link Cell, Nagpur, PGNS Complex, Modi No. 3, First Floor,
Sitabuldi, Nagpur-440012,: 0712 – 2522271,2522272 / 07774069639
E-mail: [email protected]; [email protected]
 INDEX
SI. CONTENTS Page No.
No
1 OUR BANK 2-7
2 DEPOSITS AND KYC/AML 7-26
3 GENERAL BANKING 27-66
4 GENERAL ADVANCES 66-83
5 PRIORITY SECTOR, AGRICULTURAL ADVANCES & GOVT.SPONSORED 83-114
SCHEMES
6 RETAIL LENDING 114-125
7 FINANCIAL STATEMENT ANALYSIS 125-139
8 FOREIGN EXCHANGE 139-146
9 BANKING AND TECHNOLOGY 146-179
10 NPA & RECOVERY MANAGEMENT 179-197
11 LEGAL ASPECT OF BANKING 197-208
12 OFFICIAL LANGUAGE 208-210
13 CROSS SELLING / THIRD PARTY PRODUCTS 210-215
14 LATEST BANKING & FINANCIAL NEWS 216-244
15 RECALLED QUESTIONS & TEST YOURSELF 245-275

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 1|Page
 1.OUR BANK
Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba
Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small
port town in Karnataka. The Bank has gone through the various phases of its growth
trajectory over hundred years of its existence. Growth of Canara Bank was phenomenal,
especially after nationalization in the year 1969, attaining the status of a national level
player in terms of geographical reach and clientele segments. Eighties was characterized
by business diversification for the Bank. In June 2006, the Bank completed a century of
operation in the Indian banking industry. The eventful journey of the Bank has been
characterized by several memorable milestones. Today, Canara Bank occupies a premier
position in the comity of Indian banks. With an unbroken record of profits since its
inception, Canara Bank has several firsts to its credit. These include: Launching of Inter-
City ATM Network ,Obtaining ISO Certification for a Branch,Articulation of ‘Good Banking’
– Bank’s Citizen Charter ,Commissioning of Exclusive Mahila Banking Branch,Launching of
Exclusive Subsidiary for IT Consultancy,Issuing credit card for farmers, Providing
Agricultural Consultancy Services. Over the years, the Bank has been scaling up its
market position to emerge as a major 'Financial Conglomerate' with as many as nine
subsidiaries/sponsored institutions/joint ventures in India and abroad.

History : Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Shri
Ammembal Subba Rao Pai, a philanthropist, this small seed blossomed into a limited
company as 'Canara Bank Ltd.' in 1910 and became Canara Bank in 1969 after
nationalization A good bank is not only the financial heart of the community, but also one
with an obligation of helping in every possible manner to improve the economic conditions
of the common people" - A. Subba Rao Pai.
Founding Principles : 1. To remove Superstition and ignorance. 2.To spread education
among all to sub-serve the first principle. 3.To inculcate the habit of thrift and savings. 4.
To transform the financial institution not only as the financial heart of the community but
the social heart as well. 5.To assist the needy. 6.To work with sense of service and
dedication. 7.To develop a concern for fellow human being and sensitivity to the
surroundings with a view to make changes/remove hardships and sufferings.
Sound founding principles, enlightened leadership, unique work culture and remarkable
adaptability to changing banking environment have enabled Canara Bank to be a frontline
banking institution of global standards.
OUR LOGO

The Rich Blue represents stability, scale & depth. Bright Yellow represents optimism,
warmth and energy. The new brand identity is based on the idea of a bond and is a
presentation of the close tie between the Bank and its stakeholders - from customers and
employees to investors, institutions and society at large.
OUR TAG LINE : “Together We Can”
The tag line conveys enduring relationship of Canara Bank with its Customers.
OUR SLOGAN “Life Long Banking”
OUR CORPORATE VISION : To emerge as a best practices Bank by pursuing global
benchmarks in profitability, operational efficiency, asset quality, risk management and
expanding the global reach.
OUR CORPORATE MISSION : To provide quality banking services with enhanced
customer orientation, higher value creation for stakeholders and to continue as a
responsive corporate social citizen by effectively blending commercial pursuits with social
banking.
OUR HISTORY : 1906 - Canara Hindu Permanent Fund Limited founded at 75 A,
Dongerkery Street, Mangalore with Sri Ammembal Subba Rao Pai, as “President”.
First Balance Sheet – Capital Rs.50000; Deposits Rs 42000; Advances Rs 84000; Net
Profit Rs 2420 (Rs 112/- transferred to Reserve Fund).
BRANCHES & OFFICES : Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by
late Sri. Ammembal Subba Rao Pai, a philanthropist, this small seed blossomed into a
limited company as 'Canara Bank Ltd.' in 1910 and became Canara Bank in 1969 after
nationalisation.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 2|Page
CANARA BANK- A GLANCE
Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Sri. Ammembal Subba
Rao Pai, a philanthropist, this small seed blossomed into a limited company as 'Canara
Bank Ltd.' in 1910 and became Canara Bank in 1969 after nationalisation.
MARKET CAP (RS CR): 10,154 (As on March 18 2016)
BRANCHES & OFFICES
Our Bank has a network of more than 5788 branches as at 31.01.2016, spread over all
States & 5 Union Territories of the country and, which are administered through
· Head Office at Bangalore
· 47 Circle Offices
The Bank has overseas presence in United Kingdom London; Leicester; Hong Kong;
China Shanghai; Kingdom Of Bahrain; Republic Of South Africa Johannesburg; United
States Of America New York; United Arab Emirates Dubai International Financial Centre
(DIFC); United Arab Emirates Sharjah Representative Office; Russia Commercial Indo
Bank LLC, (Joint Venture With State Bank Of India) Moscow.
Subsidiaries %age of ownership interest
as on 31.03.2015
Canbank Venture Capital Fund Ltd 100%
Canbank Financial Services Ltd 100

Canara Bank Securities Ltd 100%

Canbank Factors Ltd 70%
Canbank Computer Services Ltd 69.14%
Canara Robeco Asset Management Co. Ltd 51%
Canara HSBC Oriental Bank of Commerce Life 51%
Insurance Co Ltd
Joint Ventures
Commercial Bank of India LIC,. Moscow 40%
Associates
Canfin Homes 43.45%
Commonwealth Trust (India) Ltd
Regional Rural Bank Sponsored by the Bank
Pragati Krishna Gramin Bank 35%
Kerala Gramin Bank 35%
STAFF STRENGTH AS ON 01st March 2016
SCALE TOTAL
CHIEF GENERAL MANAGER / GENERAL MANAGER 43
DEPUTY GENERAL MANAGER 124
ASSISTANT GENERAL MANAGER 257
DIVISIONAL / CHIEF MANAGER 821
SENIOR MANAGER 2146
MANAGER 5175
OFFICER 15711
SPECIAL ASSISTANT 841
CLERK 19439
SUB-STAFF 9666
PART TIME EMPLOYEE 2

KEY INDICATORS

BANK RATE 7.00%

CRR 4%
SLR 21.25%
REPO RATE 6.50%
REVERSE REPO 6.00%
Marginal Standing 7.00%

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 Facility

Corporate Vision: To emerge as a world class Bank with Best Practices in the realms of Asset
Portfolio, Customer Orientation, Product Innovation, Profitability & enhanced value for Stake Holders.
Our Corporate Mission: To provide quality banking services with enhanced customer orientation,
high value creation for stakeholders and to continue as a responsive corporate social citizen by
effectively blending commercial pursuits with social banking.

Executive Profile:

Board of Directors: The Bank's policies and business are governed by Board of Directors consisting
of following members:

 Shri T.N.Manoharan – Chairman

 Shri Rakesh Sharma – Managing Director & Chief Excutive Officer.
 Shri Pradyuman Singh Rawat – ED ( Now retired on 31.05.2016)
 Shri Harideesh Kumar B – E D
 Shri Dinabandhu Mahapatra – ED
 Shri Suchindra Mishra – Director representing Government of India
 Smt Uma Shankar - Director representing Reserve Bank of India
 Shri G V Manimaran – Officer Employee Director
 Shri Sunil Hukumchand Kocheta - Chartered Accountant - Part -time Non-Official Director
 Shri. Mocherla Sairam Bhaskar - Part -time Non-Official Director
 Shri. Rajinder Kumar Goel - Shareholder Director
 Shri Sanjay Jain – Shareholder Director
1.RBI Governer - Shri RAGHURAM RAJAN
2.IBA Chairman - Mr. K.R. KAMATH, CMD – PUNJAB NATIONAL BANK

CANARA BANK RESULTS AS ON 31st MARCH 2016

 Reorienting towards retail business and recovery for a sustained path of growth and
profitability.
 Total Business at ` 8.05 lakh crore, with total Deposits at `4.80 lakh crore and Advances
(net) at ` 3.25 lakh crore.
 Retail term deposits at `1.72 lakh crore, up by 21.62% y.o.y.
 Retail term deposits share in domestic term deposits at 56.5%, up from 48.5% a year ago.
 CASA deposits at ` 1.24 lakh crore & CASA%(domestic) at 27.4%, up from 25.5% a year
ago.
 Retail Assets (Agriculture, MSME, Housing & other Retail Schemes) at `1.88 lakh crore, up
by 16.17% y.o.y.
 sustained y.o.y growth in Priority Credit (23%), Agriculture (14%), MSME (10%), Retail
Lending (27.8%), including Housing Loans (38.6%).
 Mandatory norms complied under Priority Credit, Agriculture, MSE (Accounts), Minority
Communities, Weaker Section & women beneficiaries.
 Overriding emphasis on expanding Digital Banking. enhanced E.transactions at 54.21%.
 Mobile Banking users at 38.50 lakh (22.16 lakh last year) & Net banking users at 24.10 lakh
(15.36 lakh last year).
 Enhanced delivery channels. 5849 branches, 170 e.lounges, 9251 ATMs & 3.2 crore Debit
Cards.
 Gross NPA Ratio at 9.40% and Net NPA ratio at 6.42%.
 Cash Recovery at ` 4758 crore.
 Comfortable CRAR at 11.08%, CET 1 ratio at 8.18%.
 Non.interest income for FY16 at ` 4875 crore, up by 7.14% y.o.y.
 Interest Expenses marginally up by 0.51% y.o.y vis.a.vis 11.38% last year.
 Control on cost; operating expenses increase curtailed to 3.14% y.o.y vis.a.vis 19.45% last
year.
 NIM (Domestic) at 2.34% and NIM (Global) at 2.19%.
 Cost of Deposit down to 6.94% from 7.38% last year.
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  Operating profit for FY16 at ` 7147 crore, up by 2.82% y.o.y.
Total Provisions for FY16 at ` 9959 crore and net loss for FY16 at ` 2813 crore.
Goals: March 2017
Thrust on Retail Business & Asset Quality - CASA, retail deposits, retail credit, fee income, recovery
and improving operational financial ratios, such as, NIM, RoA, RoE and Cost-to-Income.
RBI POLICY RATES : KEY INDICATORS

Bank Rate 7.00 %

Marginal Standing Facility 7.00 %
Cash Reserve Ratio 4.00 %
Statutory Liquidity Ratio 21.25 % w.e.f. 2nd April 2016 ( Further reduction by 25
bps is scheduled on each day of 9 July 2016(21%) ,1st Oct 2016 (20.75% )and 1st Jan
th

2017 ( 20.50 %)

Repo Rate 6.50 % w.e.f.5th April 2016

Reverse Repo Rate 6.00 % w.e.f 5th April 2016
Base rate of our bank 9.65 %
Over night MCLR 8.80 % w.e.f. 1st May 2016
One Month MCLR 9.10 % w.e.f. 1st May 2016
Three Month MCLR 9.20 % w.e.f. 1st May 2016
Six Month MCLR 9.25 % w.e.f. 1st May 2016
One Year MCLR 9.35 % w.e.f. 1st May 2016
ECNOS One Year MCLR +525 BPS = 14.60 %
Foreign Currency ECNOS 12m LIBOR + 6.5% (IO/19/2010)
BPLR 14.45% wef 01.01.2014
Clean Rate Highest MCLR +700 BPS = 16.35%
SB Rate 4% wef 03.05.2011 (Partially liberalised)
Bank Rate: Under Section 49 of the Reserve Bank of India Act, 1934, the Bank Rate has been
defined as ―the standard rate at which the Reserve Bank is prepared to buy or re-discount bills of
exchange or other commercial paper eligible for purchase under the Act. On introduction of LAF,
discounting/rediscounting of bills of exchange by the Reserve Bank has been discontinued. As a
result, the Bank Rate became dormant as an instrument of monetary management. It is now
aligned to MSF rate and used for calculating penalty on default in the cash reserve ratio (CRR) and
the statutory liquidity ratio (SLR).

Marginal Standing Facility Rate: To meet additional liquidity requirements, banks can borrow
overnight funds from the Reserve Bank under the Marginal Standing Facility (MSF) at a higher rate
of interest, normally 100 basis points above the policy repo rate. Banks can borrow against their
excess SLR securities and are also permitted to dip down up to two percentage points below the
prescribed SLR to avail funds under the MSF.

SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum
percentage of deposits that the bank has to maintain in form of gold, cash or other approved
securities. In terms of Section 24 of the Banking Regulations Act, 1949, scheduled commercial
banks have to invest in unencumbered government and approved securities certain minimum
amount as statutory liquidity ratio (SLR) on a daily basis. In addition to investment in
unencumbered government and other approved securities, gold, cash and excess CRR balance are
also treated as liquid assets for the purpose of SLR.

CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their
deposits in the form of cash. However, actually Banks don‘t hold these as cash with themselves, but
deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as
equivlanet to holding cash with RBI.

o Banks have to maintain minimum 95 per cent of the required CRR on a daily basis and 100
per cent on an average basis during the fortnight.

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 o Calculations
CRR for the current fortnight= a fixed percentage (%) of the total demand and time liabilities
reported by the banks in terms of Section 42 (1) of the Reserve Bank of India Act, 1934 with a lag of
1 fortnight i.e. CRR for the fortnight ended April 4, 2014 is a fixed percentage (%) of the total
demand and time liabilities reported by the banks as on the reporting fortnight March 7, 2014.
The Fixed percentage is based on the policy announcement or otherwise.
Repo rate is the rate at which banks borrow funds from the Reserve Bank against eligible collaterals
and the reverse repo rate is the rate at which banks place their surplus funds with the RBI under the
liquidity adjustment facility (LAF) introduced in June 2000. The repo rate has emerged as the key
policy rate for signalling the monetary policy stance.
Liquidity adjustment facility (LAF): LAF is a monetary policy tool which allows banks to borrow
money through repurchase agreements. LAF is used to aid banks in adjusting the day to day
mismatches in liquidity. LAF consists of repo and reverse repo operations. Repo or repurchase option
is a collaterised lending i.e. banks borrow money from Reserve bank of India to meet short term
needs by selling securities to RBI with an agreement to repurchase the same at predetermined rate
and date. The rate charged by RBI for this transaction is called the repo rate. Repo operations
therefore inject liquidity into the system. Reverse repo operation is when RBI borrows money from
banks by lending securities. The interest rate paid by RBI is in this case is called the reverse repo
rate. Reverse repo operation therefore absorbs the liquidity in the system.
IMPORTANT BANK / FINANCIAL TERMINOLOGY
"Interest Spread" & "Net Interest Income" are one and the same.
Spread: Difference between the Yield on Working Funds and Cost of Working Funds represents
Spread.
 Net Interest Margin (NIM) : NIM is the ratio of net interest income (Total Interest Income
minus Total Interest Expenditure) to average earning assets.The difference between „non-
interest expenditure‟ and non-interest income‟ is defined as"Burden".
 "Interest Spread‟ less „Burden‟ determines " Operating Profit‟ "
 Profit vs. Profitability: While profit represents an absolute figure, profitability, measured by a
ratio, represents the operational efficiency. As opposed to absolute profit volumes, profitability
is a more meaningful yardstick of operational efficiency as it is size-neutral.
 Return on Assets (RoA) : RoA is the ratio of Net profit to total assets. This is a standard
measure of profitability with 1% deemed as the international benchmark.
 Return on Capital (ROC): ROC is the ratio of net profit to share capital. It indicates the return
on paid up capital.
 Return on Net worth , also known as Return on Equity (ROE): Ratio of net profit to average net
worth (share capital, plus reserves minus intangible assets). It indicates the return on equity
capital.
 Book Value: Net worth divided by number of shares. Market price of share generally factors
Book Value.
 Earning Per Share (EPS) & Price earning Ratio (P/E ratio) : EPS is the ratio of Net profit to
number of shares.
 Price – Earning is the ratio of market price of a share to earning per share. EPS and P/E ratios
indicate the ability of the bank to access to the capital market and the appetite of the bank‟s
scrip in the market.
 Capital to Risk-weight Assets Ratio (CRAR): Total capital, consisting of Tier-I & Tier-II
capital, as a ratio of risk-weighted assets. It indicates the soundness and risk bearing ability of a
bank.
 Yield on Advances: Interest income on advances divided by average advances indicates
average yield on advances.
 Yield on Investments: Interest & dividend income on investment divided by average
investments indicate yield on investments..
 Yield on Working Funds: Total interest income divided by average working funds, consisting
of interest earning and non-interest earning assets.
 Cost of Deposits: Interest paid on deposits divided by the average deposits, consisting of
Current, Savings and Term deposits. This is the comparable benchmark for liabilities
management.
 Cost of Borrowings: Interest paid on borrowings, including borrowing for Tier-II capital,
divided by average borrowings.
 Cost of Interest Bearing Liabilities: Interest paid on deposits and borrowings divided by
average interest bearing liabilities (deposits and borrowings, including Tier-II bonds).
 Cost of Working Funds: Total interest expenditure divided by average working funds,
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 consisting of interest bearing and non-interest bearing liabilities (total of liability side of balance
sheet).
 Intermediation Ratio: It measures the ratio of operating expenditure to total assets. As per
international criterion, this ratio should be less than 1 per cent.
 Cost- Income (Efficiency) Ratio: Non-interest expenditure divided by net total income (total
income minus interest expenses). It signifies movement in operating cost relative to
income.Global benchmark is 40 per cent.
 Burden Ratio: Ratio of non-interest income to non-interest expenditure. As an efficiency
criterion, non-interest income should be able to cover the non-interest expenditure.
 A recent cost benefit study on ATMs has revealed that a minimum of 150 transactions per day is
required on an ATM to make it BREAK-EVEN.

2. Deposits & KYC

 Officially Valid Documents for Individual: Passport, DL, PAN Card, Voter ID, NREGA Card,
Letter issued by UIDAI
 Introduction not mandatory for all accounts
 7 parameter for Risk categorization : Customer type, Profession ,Business type, Product
code, Account Vintage ( not applicable to 102,108,111,112,127,119 product code )
,Account status , Balance
 Review of Risk Rating , once in 6 months as on 15th of may and 15th of Nov every year
 Updation periodicity of identification data : LR→10 Years , MR→8 Year and HR→2 Years
 In case proof of address furnished by the customer is not the local address or the address
where the customer is currently residing, the Branch may take a declaration of the local
address.
 Instead of two KYC documents by the Proprietary Concern for opening an account/KYC
updation, Branches may accept only one of those documents as activity proof. In such
cases undertake contact point verification, establish the existence of such firm, confirm that
the business activity has been verified from the address
 Fresh proof of identity and address need not be obtained at the time of periodic updation of
low risk customers, in case of no change in status with respect to their identities and
addresses. A self-certification by the customer to that effect should suffice in such cases.
Customer’s physical presence in such case is not required.
Revised KYC Norms for Proprietary Concerns.
Branches to Obtain & Verify any of the one documents mentioned below:
Proprietor‘s identification procedure and also verify documents in the name of Proprietorship concern
like:
1. Proof of the name, address and activity of the concern, like registration certificate (in the case of
a registered concern),
2. Certificate/License issued by the Municipal authorities under Shop & Establishment Act,
3. Sales and income tax returns, CST/VAT certificate,
4. certificate/registration document issued by Sales Tax/Service Tax/Professional Tax
authorities,
5. License issued by the Registering authority like Certificate of Practice issued by Institute of
Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company
Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.
6. Registration /licensing document issued by Central Government or State Government Authority/
Department as well as IEC (Importer Exporter Code) issued by the office of DGFT may be accepted as
identity document.
 AADHAR: Is a 12 digit unique identity number which UIDAI will issue for all Indian residents. It is
built on database linked to basic demographic and biometric information of resident concern.
Aadhaar will prove identity but will not confer citizenship. It is sufficient to fulfill the KYC.
 The "small value accounts" means and include the accounts of those persons who intend to keep
(i) balances not exceeding Rs.50,000/- (Rupees fifty thousand only) in all their accounts taken
together (ii) the aggregate of all credits in a financial year does not exceed Rs.1 lac and (iii) the
aggregate of all withdrawals and transfers in a month does not exceed Rs.10,000/-.

Maintaining the Records of Transactions (Cir 172/2010)

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Banks shall maintain the record of all transactions including the record of all transactions involving
receipts by Non Profit Organizations of value more than Rs.10 lakh or its equivalent in foreign
currency.
Cash Transaction Report (CTR): All Cash transactions of the value of more than Rs.10 lakh or it's
equivalent in FC or series of cash transactions aggregating Rs.10 lacs or more in one month. Report
to be submitted to FIU IND by 15th of succeeding month.
All Cash Transactions of Rs.10 lakh and above or equivalent in Foreign currency. All series of cash
transactions integrally connected to each other, though less than Rs.10 lakh each, aggregating Rs.10
lakh and above. Report to Financial Intelligent Unit (FIU-IND) on monthly basis.Records of ALM to be
preserved for 10 years. Domestic Wire Transfer Rs.50,000/- and above should contain full information
like name, address, and A/c No. etc.,
A new screen CIM51 - has been introduced for capturing KYC details

 Categorisation of Customers:
 Low Risk Customers (Level 1 customer):
 Salaried Employees
 People belonging to lower economic strata
 Government Departments
 Government Owned Companies
 Regulatory and Statutory Bodies
 Periodical updation of customer data: (latest photograph and address proof)
Low Risk Customer: Once in 10 years
Medium : Once in 8 years.
High Risk Customers: Once in 2 years
This exercise has to be done quarterly ie in April, July, October and January.
Simple KYC norms procedure for Canara Basic Saving Bank Account.
 KYC Guidelines issued under: Section 35A of the Banking Regulation Act, 1949

Medium Risk Customers (Level 2 customers)

High Net worth Customers
Non Resident Customers
Blind and Pardanishin also under Medium Risk Category
 FINANCIAL ACTION TASK FORCE(IO 39/2012)
The Financial Action Task Force (FATF) which is a global body, identifies countries / jurisdictions that
have strategic deficiencies in AML/CFT standards and works with them to address those deficiencies
that pose a risk to the international financial system.
 Politically exposed persons (PEP)(335/2011)
Politically exposed persons are individuals who are or have been entrusted with prominent Public
functions in a Foreign Country, e.g., Heads of States or of Governments, Senior Politicians, Senior
Government / Judicial / Military Officers, Senior Executives of State-owned Corporations, important
Political Party Officials, etc
Parameters adopted for Centralised fixing of Threshold Limit.
Rural Semi Urban Urban Metro
SB General (101) 50000/- One lacs Two lacs Three lacs
SB Cansaral (108) 50000/- 50000/- 50000/- 50000/-
SB Canchamp(109) 50000/- 50000/- 50000/- 50000/-
SB Staff (111) One lac One lac One lac One lac
Current 2 lakh 3 lakh 4 lakh 5 lakh
OD/OCC 2 lakh 3 lakh 4 lakh 5 lakh
Transaction using Forged or Counterfiet Indian Currency Notes:

 Transactions using forged or counterfeit Indian Currency notes to be reported under

Counterfeit Currency Report (CCR).
 Attempted transactions by customers are to be reported under Suspicious Transactions Report
(STR) even if the transactions are not completed by customers irrespective of the amount
 Retirement of import bills: It applies to private imports where the amount involved is more
than `20000/-. Retirement of import bills should not be made by cash payment.
 Savings Bank Deposit is called the "Mother of all Deposits".
 Intended for savings for future. No restrictions on number and amount of deposit can be made
on any day.
 Joint accounts : Max.4 members

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  Minors of age 10 years age can open self operated account in all our branches. The Bank will be
implementing the provision of sending SMS alerts to the parents regarding all transactions in the
account, as a precautionary measure.
 Minimum balance: Rural Rs.500/- and other than Rural Rs.1000/- with or without cheque Book
facility.
 Rate of interest : 4% w e f 03.05.2011(RBI fixes)(ROI calculated on daily product basis from 01-
04-2010 as per RBI instructions) Cir 82/2010
 Payment of Interest on Savings Bank has been changed from Halfyearly to Quarterly w.e.f. 01-
05-2016 [252/2016]
 In case of joint accounts with Illiterate and Literate: Operation by Illiterate or
 Jointly. In special cases, we can permit operation by literate only, by taking-Authorisation cum
Indemnity letter‖ from illiterate person on stamped paper with requisite value.
 Cheque book can be issued for blind person for specific purpose.
 Minimum amount of withdrawal /deposit is Rs.10/-
 TOD: Satisfactory dealings for 6 months. Scale IV and above can permit upto Rs.10000/-. TOD
against expected salary maximum Rs.5000/-. & for maximum 15 days but with the prior
Permission of executive at CO (applicable for upto Scale III officers) No Powers to sanction TOD
in SB/CA by authorities upto Scale III
 Free DDs: Upto Rs.25000/- and upto 2 DDs basing on previous month‘s minimum balance. In
case of new accounts, upto Rs.10000/- can be issued free of charges without reference to
minimum balance. To be permitted by branch in charge.
 Free Cheque leaves per year: 40. Above this Rs.3.00(urban and non individuals) and Rs.2-
50(rural) per cheque leaf.

Minimum balance waived in following circumstances:

 NRI while opening the account or having other deposits
 Zero balance accounts at the time of opening the account or if we are having any other deposit
or Housing Loan account
 Students Accounts
 Pensioners drawing pension through our Bank
 Employees of our Bank
 Ex-employees of the Bank who are eligible for preferential rate of interest.
 Canara Super Salary Savings Account
General Aspects pertaining to Savings Bank and Current Account:
 Wherever Thanks giving letter in NF 154 sent is returned undelivered, branches should
immediately take appropriate action to safeguard the interest of the Bank. Branches can mark
High Risk Account Severity memo in option CIM 13 (or) BA437 in CBS.
 For first 6 months, rubber stamp bearing “new account” to be affixed on cheque leaves( IBA
guidelines)
 All debits of Rs.25,000/- and above in case of SB and Rs.1 lakh and above in case of CA to be
authorized by Manager of Department/Branch in charge for first 6 months Withdrawals by way
of Withdrawal form exceeding Rs.15,000/- to be authorized by Manager in charge of dept. in
case of ELB/VLB and Branch incharge or line manager in case of large, small and medium
branches (Cir no.170/2006 & 13/2009) However, all other aspects like checking / confirming the
entry, verifying signature & other details etc., shall be carried out scrupulously by the concerned
supervisor only.
 Deposits of Rs.1 lakh per person per Bank are having insurance coverage from DICGC. Premium
is 10 paise per Rs.100- per annum, payable half yearly.
 Passport size/stamp size Photograph of depositor/authorized signatories Signature on reverse of
photo – depositor and supervisor
 Photo not necessary for Pension accounts, employees accounts, term deposits below
Rs.10,000/-, NNND a/c.

Quoting of PAN of the customer is mandatory for any of the following transactions related
to banking: (Cir 183/2011)
a) Opening a time deposit, exceeding fifty thousand rupees,
b) Opening an account, (not being a time-deposit)
c) Payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount
aggregating Rs.50,000 or more during any one day
d) Deposit in cash aggregating Rs.50,000 or more during any one day,
e) Submission of application for issue of credit card.
f) Submission of application for issue of debit card.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 9|Page
SAVINGS BANK

 Savings Bank Deposit is called the "Mother of all Deposits" (Cir 37/2008)
 Joint accounts : Max.4 members
 Rate of interest : 4% wef 03.05.2011(ROI calculated on daily product basis from 01-04-
2010 as per RBI instructions)Cir 82/2010
 In case of joint accounts with Illiterate and Literate: Operation by Illiterate or
Jointly. In special cases, we can permit operation by literate only, by taking
―Authorisation cum Indemnity letter‖ from illiterate person on stamped paper
with requisite value.
 Cheque book can be issued for blind person for specific purpose.
 Minimum amount of withdrawal/deposit is `10/-
 Stipulation of cash deposit as initial deposit for newly opened Savings Bank Deposit
accounts has been waived.
 Minors of age 10 years age can open self operated account in all our branches.
SMS alerts are sent to the parents regarding all transactions in the account. (Cir
424/2010)
 Minimum balance: Rural- with or without cheque book `500/- Semi Urban, Urban, Metro
& Speccialised branches: with or without cheque book `1000/- in SB 101 balance
maintenance is on average monthly balance basis and not on daily balance
basis.(178/2015)
 Scale IV and above can permit TOD upto Rs 10000/- upon satisfactory dealings for 6 six
months
 TOD against expected salary maximum Rs 5000/- & for maximum 15 days but
with the prior Permission of executive at CO (applicable for upto Scale III officers)
No Powers to sanction TOD in SB/CA by authorities upto Scale III (Cir
113/2010).Under Canara Pay Roll Package Account Branch Head can allow TOD in
account (Max Two times In a calendar year )Max Upto 50% of last month Net
salary credit with maximum upto 50000/-( 148/2014) and TOD up to 50% of
monthly pension on request after 15 days from last pension credit in SB Accounts
to permitted to Pensioners receiving pension through our Bank under Canara
Jeevandhara SB Account
 Free DDs: Upto `25000/- and upto 2 DDs basing on previous month‘s minimum
balance. In case of new accounts, upto `10000/- can be issued free of charges
without reference to minimum balance. To be permitted by branch in charge.
 Cheque Leave : 20 cheque leaves free in a calendar year. Beyond 20 leaves
,`
2.5 per cheque leaf MICR charges for Rural Individual. For others Chrages are Rs 3 per
cheque leaf ( beyond 20 cheque leaves) ( 193/2013)
 Scheme Based relaxation is there on number of cheques issued free under Canara basic
saving Bank deposit, canara payroll package account,Canara Jeevan Dhara,Canara
Defence Saving Bank account, Gen Y account, etc.
 50 debit entry per half year. If Debit Entries (excluding Alternate Channels)
exceeds `50 per half-year, either by cheques or otherwise, charges at `10/- per
Debit to be collected. (Feb to July and Aug to Jan).
 Transfer of Savings Bank accounts to any of our branches: Only out of pocket expenses
to be recovered with a maximum of ` 50/- (cir 7/2011)
Opening the accounts of Minors with Mother as Guardian is permitted. However ,if any loan is
to granted for meeting the necessity of Minor, loan paper to be signed by father also.
In case of Joint Accounts, with E or S clause, on the death of one of the account holders,
the other person can continue the SB account without closing the A/c.
 In case of cash payment to blind persons, no outside witness is required unless
visually impaired person requests for same.An employee/officer ( other than
the cashier making the payment)may sign as a witness for such payments to
the visually impaired person.The undertaking letter in NF 116 need not be
obtained from a literate blind.

List of Eligible Institutions permitted by RBI for opening SB accounts and earning
Interest thereon (As per Manual of Instructions – SB/CA)
 Primary Co operative Credit Society financed by the Bank

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 10 | P a g e
 Khadi & Village Industries Board
 Agriculture Produce Marketing Committee
 Society registered under Societies Act or any other corresponding law in force
 Companies governed by Section 25 of Companies Act.
 Government Departments, bodies, agencies in respect of Grants, Subsidy
released for implementation of various programmes, sponsored by Central
Government.
 Development of Women and Children in Rural Areas (DWCRA)
 Self Help Groups – Registered and Unregistered, Farmers Club, Vikas Vahini
 Non corporate bodies viz clubs, societies, associations, schools etc.
 Trust, Executors and Administrators
 All monies contributed to Provident Fund
 Capital Gains Account Scheme 1988
List of Organizations/Institutions whose SB should not be opened:
 Government Departments, bodies depending on Budgetary allocation for performance of
the functions.
 Municipal Corporations, Committees, Panchayat Samithis
 State Housing Boards
 Water and Sewage Drainage Boards
 State Text book Publishing Co-operative Societies
 Metropolitan Development Authority
 State, District level Housing Corporations
 Any Political Party
 Any Trading or Business or Professional concern, where such concern is Proprietary or
Partnership firm or a Company.
Minimum balance waived in following circumstances:
 NRI while opening the account or having other deposits
 Zero balance accounts at the time of opening the account or if we are having any other
deposit or Housing Loan account
 Students Accounts
 PMJDY account
 SB account of senior citizen ( 60 years and above)
 Pensioners drawing pension through our Bank
 Employees of our Bank
 Ex-employees of the Bank who are eligible for preferential rate of interest.
 Balance requirement/ Waiver of minimum balance charges as permitted by the
respective Wings : (CBS – SB Product code in brackets)
1. Canara Basic Savings Bank Deposit Account (108)
2. Canara Small Savings Bank Deposit Account (127)
3. Canara Champ Savings Bank Account (109)
4. Canara NSIGSE Savings Bank Account (128)
5. Canara SB Gen-Y Account (129)
6. Canara Savings Bank Defence Account (130)
7. Canara Payroll Package Savings Bank Account (131) ( Only Nil initial balance)
8. Canara Jeevandhara for Senior Citizen(110)
9. Canara Junior Saving Account (120)
10.Canara SB Power Plus Account(132) ( Only Initial Deposit Zero)

RBI Guidelines on Pension Accounts

 The pensioner is not required to open a separate pension account.
 Joint Account with his/ her spouse: All Central Government Pensioners (except
the pensioners of the Telecom Department) and those State Governments which
have accepted such arrangement can open Joint Account with their spouses.
 The Joint Account of the pensioner with spouse can be operated either by ‗‗Former or
Survivor" or ―Either or Survivor".
 The disbursement of pension by paying branch is spread over the last four working days
of the month.
 March month - the pension is credited on or after the first working day of April.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 11 | P a g e
 Account transfer from one branch to another branch of the same bank within the same
centre or at a different centre – Permitted.
 He/ She can transfer his/ her account from one authorized bank to another within the
same centre (such transfers to be allowed only once in a year);
 He/ She can also transfer his/ her account from one authorized bank to another
authorized bank at different centre.
 The pensioner is required to furnish a Life Certificate/Non – Employment
Certificate or Employment Certificate to the bank in the month of November.
Digital Life certification of pensioners/family pensioners by linking Aadhaar
based biometric verification system to Jeevan Pramaan Portal of Government of
India is implemented, jeevanpraman.gov.in (308/15)
 In case Pensioners fails to submit Life Certificate within stipulated date , it is
decided to hold the monthly pension from January every year ( which is
payable on first working day of February ) and for the subsequent months by
employees pension fund itself, till receipt of confirmation of Obtention of life
certificate by branches . Till then monthly pension amount will be kept on hold
at Employees‘ Pension Fund.
 Life Certificate as well as other certificates can be submitted to any branch of
the Bank. The Life certificate obtaining branches shall send email consolidating
all the life certificates obtained to [email protected] in two batches
- first set by 20th November and the final on or before 5th December every
year, as an attachment in excel format .The branch shall mark a copy of the
email to respective Pension crediting branches without fail.
Core Banking System and the operationalisation of Centralised Pension Processing Centre,
the pensioner/family pensioner who wish to transfer his/her pension account from one
branch to another branch (local or out station) of the same bank should have the option of
putting in his/her request at either of the two branches instead of the present dispensation
wherein transfer request is entertained only at the home branch.(BA995)(Cir 156/2013)
The pensioner‘s account is not allowed to be operated by a holder of Power of Attorney.
Cheque book facility and acceptance of standing instructions for transfer of funds from the account is
permissible.
 Deduction of Income Tax at source from pension payment: The pension
p a yi n g b an k i s r e s p o n s i bl e f o r d e d u c ti on o f In c o m e T a x f r o m p e n si o n a m o u n t in
a c c o r d a n c e w i th th e r a t e s p r e s c r i b e d b y t h e In c o m e T a x a u t h o r i ti e s f r o m ti m e to
ti m e .
 TDS to deducted by CPC in case of Central Pensioner.
 Defence Service personnel – Grant of dual pension to NoK(Next of Kin) of defence
pensioners from Military/Civil department and Continuation of family pension to
disabled children even after their marriage.
 H i th e r t o a n u n m a r ri e d s o n o r a n u n m a rr i e d / wi d o w e d o r di vo r c e d d a u g h t e r w o u l d
b e c o m e i n el i gi bl e f or f a m i l y p e n si o n f r om t h e d at e h e o r s h e g e t s m a r r i e d o r
r e m a r r i e d . T h i s h a s n o w b e e n a m e n d e d t o t h e e f f e c t t h a t an u n m a r ri e d s o n o r a n
u n m a r ri e d o r wi d o we d o r d i v o r c e d d a u gh t e r , e x c e p t a d i s a b l e d s o n o r
d a u g h t e r s h a l l b e c o m e i n el i gi bl e f o r f a mi l y p e n si on f r o m t h e d a t e h e o r s h e g e t s
married or remarried. (Defence Pension)
 One of the important documents to be obtained from the pensioners/family
pensioners at the time of commencement of pension/family pension is the
"Undertaking letter" (NF 173). This gives the bank a better protection for
recovery of excess payment of pension to the pensioners/family pensioners.

Different types of customers.

a. Minor
Minor is a person who has not completed 18 years of age. As minor has no capacity to enter into
contract, the account is opened with father or mother as Guardian. As soon as a minor attains
majority, fresh set of application with specimen signature card and photograph of the minor, duly
countersigned by the guardian should be
obtained, to continue to allow the operations in the account by the erstwhile minor (now major).
Hence it is necessary to maintain proper records of the date of birth of minor.
SB account may be opened and operated by the minor himself for reasonable amounts, provided
he has attained the age of 10 years and is literate. Declaration/No objection certificate to be
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 12 | P a g e
obtained from the Guardian/parents that the minor has acquired sufficient knowledge about
opening/operating the bank account.

a. Account is to be opened for a reasonable amount

b. No cheques book is to be issued and
c. Minor has to come in person for withdrawal.
b. Illiterates
In case of joint account with illiterate and literate: operation by illiterate or jointly.
In special cases, we can permit operation by literate only, by taking "Authorization cum indemnity
letter" from illiterate person on stamped paper with requisite value. Illiterate person can give
POWER OF ATTORNEY in favour of a literate who can operate the account on behalf of the
illiterate. Photo must be taken.
c. Hindu Undivided Family (HUF) : In the case of Hindu Undivided Family (HUF) accounts,
operations in the accounts must be by Karta only.

d. Visually Challenged Persons

Accounts can be opened for visually challenged persons with due precautions
and observing prescribed procedures to protect their interest. Cheque book can also be issued for
specific purposes. He should not issue cheques to third parties. For opening of account and
withdrawals from his account, he should come in person. Joint account with others is permitted.
Even if the person is literate, LTI should be obtained with witness. Both cash deposits and
withdrawals require witness in addition to oral confirmation from the account holder.

CURRENT ACCOUNT
Current accounts are designed to meet the needs of such section of the public who
operate the accounts regularly and frequently like traders, businessmen, corporate
bodies or the like who receive money and make payments very often. There are no restrictions on
the number of withdrawals or deposits.
Interest is not paid on the amounts kept in the current accounts.
Like SB accounts, minimum balance is to be maintained in Current Account also failing which
charges are levied as per rules.
Joint Account can also be opened with a maximum of 4 persons

1. CA should not be ordinarily opened for Minors and Pardanishin ladies.

2. Opening of CA for illiterate person with Manager’s discretion.
The Bank also offers a high end product Canara Premium Current Account, Canara Privilege
Current Account wherein customers are extended more facilities and convenience.

Proprietorship:
 Letter of proprietorship should be signed in the personal capacity of the
proprietor.
Partnership:
 Registration certificate if registered; Partnership deed along with our
account opening form partnership letter are to be obtained.

 We should not open partnership account where one of the partners is HUF.

Joint Stock Companies:

Following are required for opening a company account.
 Memorandum of association, Articles of Association
 Certificate of Incorporation
 Certificate of Commencement of business (For public limited co only)
 Board resolution for opening of account i s t o b e obtained for opening the account of
a Public Limited Company.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 13 | P a g e
Clubs / Associations:
For opening an account, Copies of rules and bye laws duly certified by one of the officer bearers
should be obtained. Operations in the account are to be permitted as per the rules/bye laws only.
Societies:
For opening an account we should ask for copies of rules/bye laws, certified copy of resolution
permission from cooperative department if any, certificate of registration. Trusts:
Trust deed should be called for. All trustees must join in opening the account. If there is no
trust deed, account can be opened if the trust is registered with the charities commissioner.
The certificates given by him will have the list of trustees. Executors/Administrators:
Certified copies of original will Et codicil, if any and Probate, if any /letter of administration are to
be taken. Each of the executors can operate the account individually (unless the will/probate
provides otherwise)
In the case of Administrators all must join in operating the account (unless the contrary is provided
in the letter of administration)
Account generally is to be opened with initial deposit in cash. Initial deposit by cheque should
be avoided. This is because while collecting cheques, we can get legal protection only if they
are collected for customers. However in exceptional cases like LIC, Government departments
etc., accounts may be opened with their own cheques
TERM DEPOSITS
Our Bank has several Term Deposit schemes viz.
Fixed Deposit , 2.Kamadhenu Deposit, 3. Ashraya Deposit,
4. Recurring Deposit Dhanvarsha, 5. New Nithya Nidhi Deposit,
6.Canara Tax Saver, 7. Capital Gains
Common Guidelines:

 KYC norms are applicable for opening Term Deposits also.

 Literate minor more than 12 years old can open Term deposits operated by self under his
signature.

 Normally the deposits are accepted for a maximum period of 10 years only. However for
deposits as per court orders the period can exceed 120 months
also.
 Repayment of term deposit amount (the maturity value together with interest) exceeding
`20000 should not be made by cash. In such cases A/C payee DD or Account credit should
be given as per IT Act 1961, Sec 269T. In respect of FDR/KDR, no interest is paid on term
deposits prematurely closed before completion of 15th day.

 Maturity due notices should be sent 14 days before the due date of deposit. Rate of
Interest:

1. Rate of interest for term deposits is communicated by way of HO circulars as and when
changes are affected.
2. For senior citizens additional interest o f 0 . 5 % is allowed for all deposits, irrespective of
the amount and for all maturities.

3. Employees / Ex employees are eligible for preferential rate of interest.

4. Wherever compound interest is payable the same is compounded quarterly.
Renewal:
If the customer opts for automatic renewal of the deposit the deposit can be renewed from the
date of maturity, by automatic renewal. In the absence of the instructions for automatic renewal,
the deposit becomes overdue deposit.
Subsequently the customer can re invest the deposit, but the effective date of deposit will be
from the date of request.
During the overdue period the deposit earns SB interest rate effective during the period.
Overdue deposits
Term deposits are accepted for a specific contracted term and earn interest only till the end of
the contracted period. Hence, on the due date, the deposit is to be transferred to Over Due
Deposit head without fail as it ceases to earn interest from that date, until it is re invested for a
fresh term.Overdue deposits will be paid at the SB rate.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 14 | P a g e
 Addition/Deletion of names:
At least one of the original depositor’s names should continue. Maximum should not exceed
4 persons. Period, Amount and Rate of Interest should not change while adding/deleting.
Addition/deletion should be authorized by two officials one of whom should be a Power of
Attorney holder. Minor’s individual account cannot be converted into a joint account. In
case of joint account of a minor with a major, no addition/deletion/substitution of names is
permitted. Illiterate single account cannot be converted into a joint a/c. Illiterate with
illiterate (or literate) a/c no additions or deletions permitted.
Survivorship clause:
It authorizes bank to make payment of deposit in the event of death of any of the joint
depositors prior to maturity to the survivors. Survivorship clause cannot be made applicable to:

1. Joint account with an illiterate person

2. Joint account of a major with a minor
3. Joint accounts operated jointly
 As per the simplified Model operational procedure for settlement of death claims issued by IBA and
duly approved by RBI, it is notified that in the event of death of one of the a/c holders, the right to
the deposit proceeds does not automatically devolve on the surviving joint deposit a/c holder/s,
unless there is a survivorship clause.

 Further if the mandate of Survivorship is given/provided, the survivor(s) can give a valid
discharge to the bank in the case of "Either or survivor / anyone or survivor" and "Former
or survivor / latter or survivor" – joint accounts.
 Hence survivorship clause plays a vital role in the case of settlement of death claims in
joint deposit accounts held under the above conditions.
 Repayment conditions in Joint Deposits : Either or Survivor Bank is in order in making
payment to any one or more of the depositors.
 Before maturity/Grant of loan/add/delete/substitute any names
therein/issue duplicate deposit receipt.
Payable jointly
1. If all are alive: Payment before maturity or loan or for issue of duplicate receipt or for name
addition/deletion – all have to sign.
2. If anyone dies on/after maturity – Payable jointly to surviving depositors + legal heirs of
deceased depositor/s.

No 1 Or Survivor
1. No 1 dies before maturity – Pay to survivor. No need to refer to legal heirs of No1.
2. If No.1 dies on or after maturity: Pay to survivor. But take an indemnity from survivor (which
should state that the bank would be indemnified if there were any claim from legal heirs of
No.1)
3. If all are alive: No 1 has full right to close before maturity, take loans and claim for duplicate
DR.

4. If all are alive: for addition/deletion of names all depositors have to sign.

Nomination:
Banking Companies (Nomination) Rules 1985 permits banks to pay dues to nominees in the
event of death of depositor(s) without asking for succession certificate or verifying claims of legal
heirs. This simplifies settlement. Of course, as Trustee the nominee is accountable to legal heirs.

Nomination is purely voluntary and at the discretion of depositors. Payment to nominee (in the
event of death depositor) is a valid discharge for the banker. Nomination can be done in joint
a/c, proprietorship ac/also. Nomination facility is available only to individuals in their individual
capacity (in single or joint a/c). Accounts held in representative capacity (trustee, liquidator,
etc), accounts held in the capacity of partners, A/c of limited companies, associations, clubs and
other organisations are not eligible for Nomination, Nomination can be done in favour of one
individual only., Name of the nominee can be recorded in RD pass book or TD receipts if
requested by the depositor.
Duplicate Deposit Receipt:
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 15 | P a g e
 For issuing a duplicate deposit receipt, a stamped indemnity along with a surety is to be
obtained if the deposit is more than Rs. 5000/=. Unstamped indemnity is sufficient for
deposits up to Rs.5000/=. If the depositor is well known to the Bank, then surety can be
waived.
Deduction of Tax at Source (TDS) on deposits
1. TDS is applicable for all domestic term deposits
2. Tax is required to be deducted at source at the applicable rates in force at the time of
payment of interest on term deposit in case the aggregate interest on term deposits held by
the depositor exceeds or likely to exceed `10000 in a financial year.
3. TDS is to be effected even in case of cumulative term deposits where the interest is
accrued in the account, and the same is not paid to the account holder till the
closure/maturity of the deposit.
4. In case assesses are not liable to pay any tax and where Form 15H/G is duly
furnished, branches may note not to deduct the tax. Form 15H/G should invariably be
obtained at the beginning of the financial year or before the branch
credits the interest.
5. Form 15G is applicable to depositors less than 60 years of age
6. Form 15H is applicable to depositors age is 60 years and above.
7. Only resident individual other than a firm or company can give Form 15G/H
8. New Form 15G/H as per circular 550/2015 is to be obtained either in paper form or
Electronically after duly verifying through electronic process in accordance with procedure,
formats and standards..

9. On receipt of the declaration Branches have to allot a unique Identification Number to each
declaration during the quarter of the financial year and furnish the particulars of of declaration
received during the any quarter of the financial year along with unique Identification number
allotted to Income Tax authorities in their quarterly return.

10. Declaration obtained should not be submitted to the IT authorites but to be preserved for
7 years from at the end of financial year in which declaration15G/15H received. Income Tax
authorities may call for these declarations for verification by quoting the Unique Indentification
Number.

11. Mentioning the PAN in 15G or 1 5 H is mandatory. Without PAN 15G/H will not have any
value. In the absence of PAN details, higher TDS is to be effected. Form 15G/15H is not
applicable for NRI Customers.

12. . Separate serial of Unique Identification Number (UIN) are to be given for Form 15G and Form
15H.System generated Unique Identification Number will be enabled, shortly. Till
such time Brancheshave to allot serial number in the DPCDQQYYFXXXXX format. Here DPCD is 4 digit
DP Code of thebranch, QQ is Q1/Q2/Q3/Q4, YY is financial year, F is G or H (G is
for form 15G and H is for Form15H) and XXXXX is 5 digit serial number starting with
00001.
For example, the DP Code of the branch is 0413 and the Quarter is second quarter of the financialyear
2015-16 during which customer has submitted for 15G and the serial number is 00001. Thenthe
unique identification number will be 0413Q215G000001.
13. Electronic submission of Form 15G/15H will be enabled by our DIT in due course after
notificationof procedure by the CBDT.
14. The modified formats are available in the Business Objects under Report No 170088 for 15G
and170089 for 15H. Branches can generate the above reports for obtention.
8. The extraction of details of form 15G and 15H and UIN etc., will be done centrally for each
TAN.
Please note that 15G/15H records are valid only when actually obtained and fed in CBS. All
otherwaivers in respect of 15G/15H and refunds will be treated as invalid by tax authorities and
nondeductionon account of this will result in short deduction by the Branches and officials
concernedwill be held responsible for short/non-deduction.
TDS compliance is the statutory requirement and should be complied with by all the Branches/Offices
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 16 | P a g e
on an ongoing basis, without fail. As non compliance with TDS provisions attractspenal action by the
Income tax Department and also exposes the Bank to financial risk,all Branches/offices are instructed
to exercise utmost caution and ensure that all provisions relatingTDS are strictly adhered.

SAVINGS DEPOSIT
An account for individuals, non-trading organizations, permitted institutions etc. can be opened
with as minimum an amount as Rs 500/- with or without out cheque book in Rural Rs 1000/- with
or without cheque book in Semi Urban, Urban & Metro branches. Pass book, pass sheet,
nomination, standing instructions, cheque collection facilities, Debit Card, Internet & Mobile
Banking facilities available. Two free DDs upto Rs 25,000/- per month subject to maintenance of
stipulated balance. Instant credit of outstation cheques upto Rs 15,000/-, wherever eligible.
 Online SB Account:
For all Customers, Individual and Joint, in particular Young generation and Tech Savvy. Online
submission of SB application through our Bank's website, without the hassles of waiting in "Q' at
the branches.
 Canara SB Gen-Y :
A scheme for IAS/IPS/IFS Trainees/Students of Premier Professional Colleges like IIT/IIMs/NITs:
Extended to all the Branches. Accounts can be opened with NIL Initial/Minimum balance. Issue of
free Debit Card, Credit Card with personal accident insurance coverage. ATM Cash withdrawal -
upto Rs 40,000 daily, Statement of Account - Free every 15 days. Free NEFT/RTGS facility.
Transfer of funds from Parents accounts to Students accounts any where in India by
DD/RTGS/NEFT free.
 SB - Variant "Canara Jeevandhara":
For Senior Citizens: Issue of Free Senior Citizen Debit Card with Photo ID. Free remittance
through NEFT/RTGS twice per month. Issue of name printed cheque book. Free SMS/IMPS/Net
Banking. Additional Loan facility for Pensioners. Locker facility at concessional rent. Free Personal
Accident Insurance coverage* (conditions apply). Assistance in writing and execution ofWILL. E-
donation - Free to specified Institutions. Health Insurance Available at concessional premium rate.
 Canara Savings Defence Product :
For Armed Forces and Para-Military Forces: No Minimum balance required. Free unlimited number
of transactions in our ATMs. Issue of Additional Card Free -for Spouse in case of Joint accounts.
CashWithdrawal upto Rs 25,000/- per day. No Annual maintenance charges for Debit Card. Debit
Card Usages upto Rs 50,000/-(Silver/Gold) and Rs 2 lakh (Platinum) at Point of Sale/Merchant
Establishments. Easy Loans upto 3 months net salary - - Repayment in 12 months at attractive
ROI.
 Canara Payroll Package scheme: For Salaried Employees: A Deposit scheme coupled with
overdraft facility. Minimum average balance Rs 1000/- per month to be maintained. Platinum
Debit Card with photo will be given which offers many concessions & freebies. ATM Cash
withdrawal up to Rs 50,000 per day. Issue of Name Printed Cheque Leaves - 200 Free per annum.
Statement of Account through e mail - free every 15 days. Credit card with Accidental Insurance
Coverage Free. Overdrawing in case of emergency 50%of Net salary of the previous month*.
Lounge for HNI Customers. Offsite E-lounge. Conditions apply*.
 SB- Variant "Canara Power Plus":
For premier segment of Customers: Minimum Quarterly average balance Rs 1 lakh to be
maintained. Free RTGS/NEFT/DDs. ATM Cash withdrawal Rs 50,000/-per day. Statement of
accounts through email every 15 days. Name printed cheque book upto 300 cheque leaves free.
Credit card with Accidental Insurance Coverage Free. Platinum Debit Card with photo will be given
which -offers many concessions & freebies. Issue of Lockers at concessional rent.
 CANARA CHAMP:
A Savings Bank Account exclusively for Children who are below the age of 12 years. Account can
be opened with as low as Rs 100/- and operated by parent / guardian. Many facilities such as Pass
Book, Pass Sheet, nomination, Internet Banking.(viewing only), Anywhere Banking are available
under the scheme. Account holder eligible for educational loan on preferential basis subject to
conditions. Other features such as Complimentary Savings box, Complimentary Personal diary /
photo folder, free Collection of Cheques / DDs gifted to the child up to Rs 25,000/- per annum.
Accmulation of Rs.5000/- and above can be transferred to KDR at the request of the party.
 CANARA SMALL SAVINGS BANK ACCOUNT
SPREADING BANKING TO COMMON PEOPLE: A Savings Bank Account with relaxed KYC norms.
Account can be opened on production of a self attested photograph and affixation of signature or
thumb impressions as the case may be, on the form for opening the account, provided that the
Bank official while opening the account certifies under his signature that the person opening the
account has affixed his signature or thumb impression as the case may be, in his presence.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 17 | P a g e
 Canara Small Savings Bank Account can be opened with zero initial deposit and maintained with
zero balance. Total withdrawals and transfers in a month not to exceed Rs 10,000/-. Total credits
in the account in the year not to exceed Rs 1,00,000/- and balance in the account not to exceed
Rs 50,000/.
 CANARA BASIC SAVINGS BANK ACCOUNT - BASIC BANKING FACILITY: A "No frills" basic
savings bank account for the common man. Account can be opened with zero balance. ATM cum
Debit Card and Internet and Mobile Banking facility are free under the scheme. Passbook,
Nomination, Standing Instructions, Cheque Collection are also available.

CURRENT DEPOSITS & TERM DEPOSITS

For traders, businessmen, corporate bodies etc. who operate the account frequently. Minimum
amount for opening an account: Rs 1000/- in rural and semi-urban branches & 5000/- in urban
and metro branches. No ceiling on the number of withdrawals and credits. Anywhere Banking &
Internet & Mobile Banking facilities. Pass sheet, standing instructions, cheque collection facilities
available.
 CA variant' Canara Privilege:
For premier segment of Customers: Minimum Quarterly average balance Rs 1,00,000 to be
maintained. Free RTGS/NEFT/DDs. ATM Cash withdrawal Rs 50,000/- per day. Statement of
accounts through email every 15 days. No Cash handling charges upto Rs 5,00,000 per day per
account of Rs.100/- denomination and above. Issue of Free name printed cheque books - up to
500 per annum. Credit card with Accidental Insurance Coverage Free.
 RECURRING DEPOSIT:
Amount of Deposit – Minimum Rs 50/- per month (in multiples of Rs 50/-). No ceiling on
maximum amount. High Returns - Attractive rates as applicable from time to time. Interest
compounded every quarter. Period of deposit - Minimum of 6 months, maximum of 120 months in
multiples of 3 months.
 Canara Dhanvarsha:
Flexible RD Account - For all Customers: Flexibiity in payment of instalments. Minimum amount
permonth - Rs 1000 and & Maximum Rs 1 Lac. Flexibility of depositing additional amount including
regular instalment upto 10 times. Additional amount attracts same ROI as for regular amount
also. No penal charges upto four number of instalment skips per year. At present no TDS (As per
IT rules prevailing).
 FIXED DEPOSIT:
Deposit with a Minimum of Rs 1000/- & Maximum - No ceiling. Period of Deposit - Minimum 15
days & Maximum 120 months. Option available for 7 - 14 days period for deposits of Rs.5 Lakhs
and above. Interest Payment - Monthly (discounted rate), Quarterly, Half-yearly or Annual
intervals at depositor's choice. Part withdrawal and Loan against deposits available. Facility of part
withdrawal of deposits in units of Rs 1000/- is available, keeping the rest to earn contracted rate
of interest.
 KAMADHENU DEPOSIT:
Deposit with a Minimum of Rs 1000/- & Maximum - No ceiling (can be for odd amounts also).
Period of Deposit - Minimum 5 months a Maximum 120 months. Interest compounded every
quarter. Closure before maturity and Loan against deposit permissible. Facility of part withdrawal
of deposits in units of Rs 1000/- is available, keeping the rest to earn contracted rate of interest.
 ASHRAYA DEPOSIT (FOR SENIOR CITIZENS):
PREFERENCE TO OUR ELDER PEOPLE IN DEPOSIT SCHEMES: Account can be opened jointly with
other Senior Citizens or with other persons below the age of 60 years subject to the condition that
the first depositor should be the Senior Citizen. Additional rate of interest of 0.50%above the rate
as offered to General Public is extended under the scheme.
 CANARA TAX SAVER DEPOSIT: A SMARTWAY TO SAVE YOUR TAXWHILE GENERATING
INCOME: A term deposit scheme with the benefits of Deduction from income upto Rs 1.50 lakhs
under Sec.80C of IT Act, 1961. Individual account in the name of the individual for himself or in
the capacity of the Karta of a HUF can be opened. Further, Joint account can be opened by two
adults jointly or an adult and a minor and payable to either of the holders or to the survivor. In
the case of joint account, the deduction from income under section 80C of the Act shall be
available only to the first holder of the deposit. Minimum deposit of Rs 100/-(In multiples of Rs
100/- thereafter) and maximum of Rs.1,50,000/- can be made for a fixed period of 5 years and
cannot be closed before maturity. Scheme available for NRO accounts also
 DOOR STEP BANKING FOR THE PENSIONERS -692/2014:
Delivery of monthly pension at doorsteps of the pensioners aged 75 yrs and above. Minimum
amount of delivery cash on monthly basis- Rs 5000/-; Max Amount- Rs 50,000/- Request of
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 18 | P a g e
 modification once in 6 months. In the event of hospitalization, pensioner can seek disbursement of
amount either in cash or by way of EFT or DD drawn in favour of hospital; NO age limit; restriction
for payment in cash Rs 50000/- Charges: Rs 50 +ST per transaction (may be waived/concession
may be offered).
Capital Gains Accounts Scheme:
 Exemption under Section 54, 54B, 54D, 54F or 54G of Income-Tax Act. Accounts can be opened
by an individual or on behalf of a minor, HUF, a firm, a company or an association of persons or
a body of individuals. Joint Accounts can not be opened under the scheme.
 Capital Gains accounts can be opened as SB-Capital Gains Account Scheme or Term Deposits –
Capital Gains account scheme (similar to KDR or FDR) Current Account Capital Gains Scheme
can be opened by Bohra Muslim community only Except under circumstances specially permitted
for the purpose, withdrawals can be made only after the expiry of the period for which the
deposit under this account has been made and accepted.
 No Cheque book facility
 Nomination: Depositor of this scheme may nominate upto 3 nominees.
 NRE, FCNR accounts can not be opened
 Minimum balance applicable as regular deposits
 Preferential rate of interest should not be allowed for Capital Gains Account (Senior Citizens and
Employees – No preferential rate of interest)
Part Withdrawal Facility
 Permitted per unit of Rs.1000/-.
 If amount of deposit accepted in odd amount, odd amount is treated as a unit.
 Example: The deposit of Rs.10,505/- may be treated as 10 units of Rs.1000/- and one unit of
Rs.505/-
 Penalty – 1% penal cut for partly withdrawn portion.
 All deposits of domestic, NRE FDRs, KDRs accepted on or after 27-02-96 are eligible
 Applicable for all branches.
Use of Ultraviolet Lamps(Cir. 315/2008)
 Cash cheques Rs.1000/- and above transfer items above Rs.5000/- are to be screened under
Ultraviolet lamp.
Payment of Cheque after Business Hours
 Managers/Senior Managers are empowered After business hours but within office hours
 Maximum Rs.10,000/- per party – within the available balance , No TOD
 Employees not eligible
TDS on Deposits:
 New TDS Rate: Applicable with effect from 1st April 2010. Tax at higher of the prescribed rate or
20% will be deducted on all transactions liable to TDS, where the PAN of the deductee is not
available. Interest earned in a year if exceeds Rs.10,000/-,TDS to be deducted.
 Obtain Form 15G/15H if depositors age is 60 years and above) for exemption, in duplicate.
Declaration valid for one financial year only.
 Obtain fresh 15G/15H every year.
 TDS not applicable for interest paid on SB/RD.
“GHAR GHAR DASTAK & MADHUR MILAN” - A Marketing Drive / Mass Contact Program for
Business Augmentation
The previous financial year, 2015-16, was a landmark for our Bank as we recorded a good growth in
share of CASA to Domestic Deposits. The said efficiency ratio improved by 200 bps to 27.40 % as at
31/03/2016. The entire success is attributed to the enthused response and sustained momentum of
the Circles and Branches towards the Corporate initiatives undertaken throughout the year.
During the recently concluded 2016 Shubh Aarambh Campaign, Branches mobilized Rs 2939 Cr CASA
from new accounts. The Campaign enabled us to achieve our March 2016 targets set out under Life
Insurance, Health Insurance, Mutual Fund and Non-Interest Income from Associate Party Products.
As we have embarked our journey into the new FY 2016-17, a need is felt to launch across the
country an initiative that will infuse and inspire a thrust towards business growth under all our key
focused discipline / parameters.
It is in this direction that we are pleased to launch our new Corporate Initiative “GHAR GHAR DASTAK
& MADHUR MILAN”.
The Project is to be undertaken across the country / all branches in phases and endeavor at working
towards all key focus areas of the Bank simultaneously. The program is modeled as an Outreach /
Mass Contact Program wherein our branches need to scout for new business from existing as well as
prospective customers thereby enlarging the clientele base / business prospects for our Bank.
Target Group ::
The program covers all the Branches Et Circles of the Bank. Branches have been grouped on the basis
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 19 | P a g e
of their category - Metro, Urban, Semi Urban and Rural for the purpose of reckoning their
performance.
Campaign Objectives ::
The Campaign / Drive is christened as “GHAR GHAR DASTAK & MADHUR MILAN”.
“Ghar Ghar Dastak” means “Door to Door Contact” & “Madhur Milan” means “Happy Banking”
under our outreach program.
It encompasses the following objectives ::
Generate leads and business under Retail Assets, Liabilities and enhance Mobile Banking / Digitization
across all Branches.
 Approach and meet the prospective Et existing clients in the command area of the branch for
soliciting of further business.
 Also, contacting all stressed loan accounts for recovery and up gradation of NPA accounts.
 The larger goal being activation of all branches for retail business growth Et focused management
of stressed accounts in our Bank.
3. Duration of the Campaign ::
The Project is launched with immediate effect. Circles have been advised to ensure that the Ghar
Ghar Dastak drive is initiated latest by 16/05/2016.
 It shall remain operational throughout the year with focus on attaining of monthly / fortnightly
business levels.
 The Project shall be implemented in phases.
 In the Phase I, the project shall take off on Pilot Basis at State Et District Headquarters (Metro /
Urban Centres) as well as other important branches as identified by the Circles/ROs.
 Based on the experiences, it shall be rolled out to all the remaining branches in 2nd phase.
 We shall hold / conduct the Phase I for at least 3 months before rolling 2nd phase.
4. “Ghar Ghar Dastak” ::
As the name suggests, the branches should carry out a door to door contact program.
 To kick start, the identified branches shall conduct a Staff Meeting for sensitizing, briefing Et
engaging the staff with the Campaign for generating leads from the customers.
 The branch staff shall be divided into teams and assigned potential areas / localities to approach
and meet the prospective Et existing clients for canvassing retail assets Et liabilities business.
 We are stipulating a minimum Retail Business, Credit Cards Et Tech Products to be secured by the
branches depending on the location / categorization of the branch (enclosed as per annexure).
 The branches shall scout for business aiming to achieve the monthly / fortnightly targets
allocated.
 Ghar Ghar Dastak should be carried out by all the identified branches from 8th to 17th of every
month for contacting existing / potential customers for mobilizing Retail deposit and Retail loans
as well as generating compromise / OTS / up gradation proposal in all problem loan accounts for
mission Can Adalat.
 Marketing Officials are also to be engaged with pre-fixed targets.
“Madhur Milan” ::
It stands for maintaining happy banking relationship with the customers, as a delighted customer is our
ambassador for growth and visibility.
 The successful / sourced applicants/customers shall be invited for Madhur Milan at the Branch.
 Emphasis Et Success shall be on the actual disbursement / asset delivery before the audience,
requesting the customers to share their banking experiences.
 On the Madhur Milan Day, the branch should be decked up at its best and the invitees are to
be handed over sanction letters and A/c opening welcome kits over hi-tea, after business hours.
 Inviting also, at least 10-15 loyal depositor / credit clientele including HNIs / family members of
NRIs to strengthen the existing relationship and also as recognition for their continued
patronage.
 Madhur Milan should be conducted 2-3 days after Ghar Ghar Dastak activity. It may be
held on 20th of every month across the country to enhance the visibility of the inventive and
innovative concept. Branches / RO / CO should co-ordinate Et ensure conducting the same
before end of the month.
 Branch Head should keep the list of Top 100 deposit customers Et Top 100 credit customers with
full details such as address, telephone number, business with the branch, etc. All such customers
should be contacted immediately and may be invited to Madhur Milan evening during the year.
 Branches shall report the accomplishments / progress to respective RO / CO, on a monthly basis
within 3 days of Madhur Milan, for consolidation and onward transmission to Head Office.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 20 | P a g e
 R UR A L SEMI URBAN
CATEGORY / URBAN METRO
(FO RT N I GH T L Y (FORTNIGHTLY)
PRODUCT (MONTHLY) (MONTHLY)
)

5 (Rs 5000/- 10 (Rs 10000/- 40 (Rs 20000/- 50 (Rs 25000/-

SB
each) each) each) each)

10 (Rs 20000/- 15 (Rs 25000/-

CA NIL 5 (Rs 10000/- each)
each) each)

OF WHICH
POWERPLUS / 2 10 15
GALAXY /
PAYROLL & 5 (Rs 500/- 20 (Rs 1000/- 25 (Rs 2000/-
RD 10 (Rs 500/- each)
each) each) each)
HL (MONTHLY) 1 2 5 8

LHV
NIL 2 3 5
(MONTHLY)

OTHER
2 3 5 10
PERSONAL
LOAN
STAND UP
1 2 2 2
INDIA (LOAN)
AGRI TERM
LOANS 10 NIL NIL NIL
(MONTHLY)
INTERNET /
MOBILE NO. OF ACTIVE NO. OF ACTIVE USERS NO. OF ACTIVE NO. OF ACTIVE
BANKING / E- USERS TO TO USERS TO USERS TO
INFOBOOK BE INCREASED BY BE INCREASED BY 25% BE INCREASED BY BE INCREASED BY
(ANNUAL 20% 30% 40%
ACHIEVEMENT)

CREDIT CARD CARD BASE TO BE CARD BASE TO BE CARD BASE TO BE CARD BASE TO BE
(ANNUAL INCREASED BY INCREASED BY 50% INCREASED BY INCREASED BY 300%
ACHIEVEMENT) 20% 200%

TEST YOURSELF : DEPOSITS

1. Minimum amount of deposit/withdrawal in an SB account is

(a) Rs. 1.00 (b) Rs.10.00 (c) Rs. 20.00 (d) Rs.100.00 (e) None of these
2. Instant credit up to Rs. is permitted in SB accounts
(a) Rs.5000.00 (b) Rs.7500.00 (c)Rs.10000.00 (d) Rs.15000.00 (e)None of these
3. A literate MINOR can open an SB account for reasonable amounts if he/she is above the age
of
(a) 10 years (b) 12 years (c) 14 years (d) 16 years (e) None of these
4. A school going minor student can open an account if he/she has attained an age of
(a) 8 years (b) 9 years (c) 10 years (d) 11 years (e) 12 years
5. Minimum Balance in SB for an account without cheque book facility in a rural branch is
(a) Rs.100.00 (b) Rs.200.00 (c) Rs.300.00 (d) Rs.500.00 (e) Rs.1000.00
6. Minimum balance in SB for an account without cheque book facility in a Metropolitan branch
is
(a) Rs.100.00 (b) Rs.200.00(c) Rs.300.00 (d) Rs.500.00 (e) Rs.1000.00
7. Service Charge for not maintaining minimum balance in SB account is not applicable to the
accounts of
a. Pensioners b. Employees c. Non Resident Indians d. Ex - employees eligible
for preferential rate of interest e.All of the above

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 21 | P a g e
8. Withdrawal Order Form can be
(a) Used for withdrawal by account holder only (b) Used for issuing to third parties (c)
Presented in clearing (d) Used for transfer of funds (e) None of the above
9. Deposit Insurance coverage is available for deposit account up to Rs. per
Head (a) Rs.5,00,000.00 (b) Rs.2,00,000.00 (c) Rs.1,00,000.00 (d) Rs.1,50,000.00 (e) None
of the above
10. Interest is paid half yearly to SB accounts in the following months
(a) January & July (b) February & August (c) March & September (d) April & October
(e) May & November
11. Minimum Interest payable to an SB account is (a) Rs.0.50 (b) Rs.1.00 (c) Rs.2.00 (d)
Rs.5.00 (e) Rs.10.00
12. For an Individual SB account, Maximum number of names that can be added is
(a) 1 (b) 2 (c) 3 (d) 4 (e) 5
13. Maximum amount of Casual Overdrawing or TOD permitted in an SB Account by Scale IV and
above authorities is (a) Rs.1000.00 (b) Rs.5000.00 (c) Rs.10000.00 (d) Rs.7500.00 (e)
Rs.15000.00
14. Time limit for regularizing TOD permitted is (a) 7 days (b) 14 days (c) 15 days (d) 21 days
(e) 30 days
15. Inoperative account is one where there are no transactions for a period of (a) 2 years (b) 3
years (c) 5 years (d) 10 years (e) None of the above
16. Number of Free Demand Drafts (DD) permitted to SB account holders maintaining prescribed
minimum balance in the account is (a) 1 (b) 2 (c) 3 (d) 5 (e) 10
17. Acceptable documents as proof of address are
(a) Driving License (b) Passport (c) Telephone Bill (d) Rent Receipt (e) All of the above
18. Transactions in a newly opened account are monitored closely for a period (a) 1 month (b) 3
months
(c) 6 months (d) 12 months (e) 24 months
19. Keys of the Specimen signature card rack are to be held by
(a) Concerned Clerk (b) Daftary (c) Supervisor (d) Branch in charge (e) Jointly
by Clerk & Supervisor
20. Number of free cheques permitted in an SB account per calendar year is
(a) 10 (b) 20 (c) 30 (d) 50 (e) 100
21. Unclaimed Deposit is one which has not been operated for
(a) 2 years (b) 5 years (c) 8 years (d) 10 years (e) 15 years
22. Unclaimed Deposits are transferred to HO
(a) once a year on 31st December (b) Once in two years on 31st December (c) twice a year
in June & December
(d) Twice a year in March & September (e) None of the above
23. Current Account can be opened by
(a) Individuals (b)Partnership firms (c)Proprietary Concerns (d) Private & Public Limited
Companies (e) All of the above
24. In a Current Account, minimum balance to be maintained in a RURAL Branch is
(a) Rs.500.00 (b) Rs.1000.00 (c) Rs.2500.00 (d) Rs.5000.00 (e) None of these
25. In a Current Account, minimum balance to be maintained in an URBAN Branch is
(a)Rs.500.00 (b) Rs.1000.00 (c) Rs.2500.00 (d) Rs.5000.00 (e) Rs.10000.00
26. Number of free Cheque leaves permitted to a SB account of an individual in rural branch in
calendar year
(a) 10 (b) 20 (c) 30 (d) 40 (e) 60
27. In the case of employee's SB accounts, overdrawing can be permitted up to
(a) Rs.1000.00 (b) Rs.2000.00 (c) Rs.5000.00 (d) Rs.8000.00 (e) No overdrawing
permitted
28. In the case of employee's accounts, officer can permit withdrawal up to
(a) Rs.2000.00 (b) Rs.4000.00 (c) Rs.5000.00 (d) Rs.8000.00 (e) Rs.10000.00
29. If a cheque issued by an employee is returned, the same should be reported to
(a) Concerned HRM Section (b) Recoveries & Legal Section (c) Internal Control Section (d)
Balance Sheet Section (e) Need not be reported
30. A Stop Payment Order can be issued by : (a) Only the drawer of the cheque/Joint
account holders/partners (b) Holder of the cheque (c) Banker on which the cheque is
drawn (d) Payee of the cheque (e) None of the above
31. Minimum amount of deposit under Fixed/ Kamadhenu Deposit is : (a) Rs.500.00 (b)
Rs.1000.00 (c) Rs.5000.00 (d) Rs.10000.00 (e) None of the above
32. To introduce a new account, an existing account holder should have satisfactory dealings for a
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 22 | P a g e
minimum of
(a) 1 month (b) 6 months (c) 12 months (d) 18 months (e) not mandatory
33. A literate MINOR can open an FD/KD account if he/she is above the age of
(a) 10 years (b) 12 years (c) 14 years (d) 16 years (e) None of these
34. Joint term deposit can be opened with a maximum number of --- persons
(a) 4 (b) 5 (c) 6 (d) 8 (e) None of these
35. Tax is deducted at source from interest on term deposit if the interest amount in a financial
year exceeds
(a) Rs.1000.00 (b) Rs.2500.00 (c) Rs.5000.00 (d) Rs.10000.00 (e) None of these
36. Where total interest payable is above Rs.10000.00, Tax is not deducted at source if Form is
filed by mentioning PAN number (not senior citizen)
(a) 11G (b) 13G (c) 15G (d) 16G (e) None of these
37. If the amount of term deposit exceeds Rs. , it has to be paid by means
of account payee DD/PO or by way of credit to any operative account
(a) Rs.5000.00 (b) Rs.10000.00 (c) Rs.15000.00 (d) Rs.20000.00 (e) Rs.50000.00
38. Penalty imposed on the interest for closure of term deposit of less than Rs.10.00 crore before
maturity is
(a) 0.25% (b) 0.50% (c) 1.00% (d) 0.00% (e) None of the above
39. Subsidy received under PMEGP scheme is to be accounted for under term deposit
(a) FD with interest (b) FD without interest (c) KD with interest (d) KD without interest
(e) None of the above
40. For issuing duplicate deposit receipt, stamped indemnity is required if the deposit amount
exceeds : (a) Rs.1000.00 (b) Rs.5000.00 (c) Rs.10000.00 (d) Rs.25000.00 (e) None
of these
41. When a deposit is transferred from one branch to another, the proceeds are remitted by way of
(a) Demand Draft (b)Branch Advice (c) Money Order (d) Cheque (e) None of these
42. Which one of the following is not a security Item?
(a) Cheque book (b) Demand Draft (c) Term Deposit Receipt (d) Withdrawal Order Form
(e) Pay Order
43. In the case of nomination of deposits, which one is not true?
(a) Can be made by individual/joint account holders only (b) Can be cancelled (c) Can be
changed (d) Can be in favor of individual only (e) Can be made by a partnership firm
44. Which one of the following is not a deposit scheme?
(a) Canara Festival (b) Canara Flexi (c) Canara Saral (d) Ashraya (e) Canara Jeevan
45. Which of the following are true of Ashraya Deposit Scheme? : (a)Persons above 60 years of
age are eligible (b) 0.50% above the Domestic Term Deposit rates(less than 5 years) (c)
Individually or jointly (d) N R Is not eligible (e) All of the above
46. Which of the following are true of Call Deposits?
(a) Call deposits can be accepted from Contractors, Government bodies, Local bodies (b)
Call Deposits are payable on demand (c) Call deposits do not earn any interest (d)
Amounts are to be kept in Inoperative Current Accounts (e) All of the above
47. Which of the following is not true of Kamadhenu Deposit?
(a) Interest is paid along with the principal on maturity (b) Interest is paid quarterly (c)
Interest is compounded at quarterly rests (d) Minimum period of deposit is 5 months (e)
Maximum period of deposit is 10 years
48. The maximum daily collection per NNND account is
(a) Rs.50.00 (b) Rs.100.00 (c) Rs.200.00 (d) Rs.500.00 (e) Rs.1000.00
49. Minimum monthly installment amount of an RD account is
(a) Rs.10.00 (b) Rs.50.00 (c) Rs.100.00 (d) Rs.500.00 (e) None of these
50. Minimum period of an RD account is
(a) 3 months (b) 6 months (c) 9 months (d) 12 months (e) None of the above
51. Penal charges collected for delayed installments of RD is credited to
(a) GC - Miscellaneous (b) Commission - SC (c) Commission - Miscellaneous Receipts
(d) Commission - DD (e) None of the above
52. If an NNND account is closed before maturity before completion of 12 months
(a) Interest is paid (b) Commission is not recovered (c) Interest not paid & commission not
recovered (d) Interest is not paid and commission is recovered (e) None of the above
53. Tax is not deducted at source on the interest earned by deposit above Rs.10000.00
(a) Fixed Deposit (b) Kamadhenu Deposit (c) Recurring Deposit (d) Can Relax (e)
None of the above
54. Canara Basic Savings Bank Deposit account is
(a) Maximum 4 free withdrawal per month (b) Maintained with Zero balance (c) Eligible
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 23 | P a g e
for free ATM card (d) All of the above (e) None of the above
55 NNND balance confirmation letter is sent
(a) Before 16th of April/October every year through Agent (b) Before 16th of April/October
every year through Post (c) Before 30th of April/October every year through Post (d)
Before 16th of June/December every year through Post (e) None
56. Penalty imposed on the interest for closure of Domestic / NRO term deposit of Rs.1.00 crore &
above before maturity is (a) 0.25% (b) 0.50% (c) 1.00% (d) 0.00% (e) None
57. Number of free Cheque leaves permitted to a SB account of individuals in other than rural
place is : (a)10 (b) 20 (c) 30 (d) 40 (e) 60
58. Initial deposit for opening Canara Basic Savings Bank Deposit account in a rural place is: (a)
Re 0 (b) Rs 10 (c) Rs 25 (d) Rs 100 (e) Rs 500
59. In respect of interest earned the following is true:
(a) TDS is to be deducted for NRO SB accounts (b) TDS is to be deducted for NRE SB
accounts (c) TDS is to be deducted for SB accounts
(d) TDS is to be deducted from staff SB accounts (e) All the above are false
60. When a “Payment stopped Cheque” is returned and there is also no balance in the account, the
reason to be mentioned is
(a) Payment stopped by the drawer (b) Payment stopped by drawer and Refer to drawer
(c) Payment stopped by drawer and insufficient funds
(d) All the above three reasons on the safer side (e) No reason to be mentioned
61. Minimum initial deposit under CANCHAMP is
(a) Rs 10 (b) Rs 500 (c) Rs 100 (d) Rs 1000 (e) Rs 50
62. Minimum transactions and credit amount under CANCHAMP account in a half year in urban and
metro branches to be eligible for Education loan is : (a) 2 and Rs 100 (b) 4 and Rs 1000, (c) 2 and
Rs 1000 (d) 2 and Rs 500 (e) 2 and Rs 10000
63. Maximum number of joint account holders under CANCHAMP is
(a) 2 (b) 4 (c) 5 (d) No joint account permitted
64. Average quarterly balance required to be maintained in SB Power Plus scheme is :(a) 100 b)
500 (c) 1000 (d) 100000 (e) 50000
65. SB Power Plus Account can be opened in
(a) Rural branches only (b) Metro branches only (c) Specialized branch only (d)
Any branch
66. SC for not maintaining average quarterly balance of Rs.1.00 lakh in SB Poer plus is
(a) 1000.00 per quarter (b) No SC (c) No SC and No concessions from succeeding month
(d) 500.00 per month (e) None of the above
67. From a CANCHAMP account amount in excess of Rs can be placed under ...............
Deposit
(a) 10000 & Fixed (b) 15000 & Fixed (c) 5000 & Kamadhenu (d) 15000 & both Fixed or
Kamadhenu (e) 10000 & Kamadhenu
68. Number of cheque leaves that can be issued free in Canara Basic Savings Bank Deposit
account (per annum) is
(a) No cheque book facility (b) 10 (c ) 50 (d ) 60 (e) 40
69. Introduction for the current account should be obtained from
(a) Another current account holder only (b) FD/KD account holders (c) Only staff members of
the bank (d) Another current account holder having satisfactory dealings for not less than one
year period or any staff member of the bank (e) Introduction from existing customer is not
mandatory
70. Canara Privilege is :a) A retail lending scheme b) Insurance premium under Savings
Suraksha c) Current Account Scheme d) Current Account Scheme for Insurance Companies
e) None of the above
71.Minimum quarterly avg. balance under Canara Privilege account is
(a) 100000 (b) 50000 (c) 15000 (d) 25000 (e) 10000
72. SC for not maintaining average quarterly balance in Canara Privilege account is
(a) 2000 (b) 1000 (c) 250 (d) 100 (e) 10
73. At the time of closure of Canara Privilege account
a) All concessions afforded from the date of opening of account have to be recovered b) All
concessions afforded during the financial year have to be recovered c) Concessions on DD
issued only need to be recovered d) Concessions need not be recovered e) Flat SC of Rs
2000.00 to be recovered
74. Minimum amount for opening KD minimum period
(a) Rs 100 and 6 months (b) Rs 1000 and 5 months (c) Rs 1000 and 1 year (d) Rs 100
and 5 months (e) Rs 500 and 5 months
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 24 | P a g e
75. Minimum amount that can be invested in CANTAX Saver deposit is (a) Rs 1000 (b) Rs 5000 (c)
Rs 100 (d) Rs 100000 (e) Rs 10000
76. Maximum amount that can be invested in CANTAX Saver deposit is
(a) 150000 b) 10000 (c) 50000 (d) 100000 (e) 1000000
77. Period of investment under CANTAX Saver scheme is
(a) 12 months ( b) 24 months (c) 36 months (d) 60 months (e)48 months
78. Maximum amount of loan that can be granted against the security of CANTAX Saver deposit is
(a) 75% (b) 80% (c) 95% (d) 50 % (e) No loan can be granted
79. Minimum period for accepting a single fixed deposit of Rs 5 lacs is
(a) 14 days (b) 45 days (c) 7 days (d) 6 months (e) 1 year
80. Minimum period of Canara Dhanvarsha is
(a) 6 months (b)12 months (c)24 months (d) 36 months (e)60 months
81. Minimum monthly installment of Canara Dhanvarsha is
(a Rs 50/- (b) Rs 100/- (c) Rs 500/- (d) Rs 1000/- (e) Rs 1.00 lac
82. Maximum amount that can be deposited in Canara Dhanvarsha
(a) Regular instalment amount only (b) Two times of instalment (c) Rs 100000/-
only (d) Four Times of instalment (e) Ten Times of instalment
83. Simple interest is paid on premature closure of RD if it is closed
(a) After 15 days but before 3 months (b) Any time before 3 months (c) After 7 days but
before one month (d) After one month but before 3 month
(e) None of the above
84. Canara Super Savings Salary Account can be opened
(a) In all places and in all branches (b) In Select Cities in specialized Branches (c) In
Select Cities in CBS Branches (d)In all cities in CBS Branches (e) In select branches
85. Scale I Officer can pass cash cheque of customer up to Rs.
(a) Rs.1,00,000/- (b) Rs.2,00,000/- (c) Rs.50,000/- (d) Rs,5,00,000/-(e) No Limit
86. What is the full form of BCSBI
(a) Banking Codes and Standards Board of India (b) Bank Customers Standard Board of
India (c) Banking Codes and Supervisory Board of India
(d) Bank Customers and Supervisory Bureau of India
87. As per our Bank’s policy, complaints from general public are to be redressed within days :
(a)15 days (b) 7 days (c) 21 days (d) 30 days
88. Business facilitator will perform the following function/s
(a) Identification of borrowers (b) Processing of loan applications including preliminary
information (c) Post sanction monitoring (d) Follow up for recovery (e) All above
functions
89. Business Correspondents w i l l perform the following function/s
(a) Collection of small value deposit (b) Recovery of Loans (c) Sale of micro
insurance, mutual fund products (d) Receipt and delivery of small value remittances (e) All
above functions
90. Facility to our account holders which is called “Application Supported by Blocked Amount
(ASBA), is meant for: (a) Applicants subscribing for Public Issue of Shares (b) Applicants for
Housing Loans (c) Employees requiring security deposit with their employers (d) Contractors
bidding for Government Contracts (e) Staff members who opted for Pension Scheme
91. How is savings bank interest calculated?
(a) Monthly product basis (b) February and August month’s product basis (c) Half yearly
product basis (d) Daily product basis (e) Minimum balance between 10th and last day of
the month
92. What is no frill account? :(a) Another name of Can Saral account (b) Financial inclusion
savings bank account (c) No cheque book account
(d) Zero balance account, (e) Ordinary SB Account
93. What is minimum amount for super salary SB account?
(a) Zero balance (b) Rs.10000/- (c) Rs.5000/- (d) Rs.7500/- (e) Rs.1000/-
94. Under can tax saver scheme deposit the staff will get extra Interest (a) 0.5 % (b) 1% (c) no
extra interest (d) 0.25% (e) 0.25 %
95. TDS is not applicable for following account: (a) SB/CA/RD account (b) Saving bank
only (c) Current account only (d) RD account only (e) None of above
96. PAN or FORM 60/61 is required for: (a) Saving bank account only (b) Current account
only (c) Term deposit only (d) All the above (e) Not required
97. What is NF 154? : (a) It is an illiterate declaration form (b) Thanks giving letter for new
account (c) New SB account opening form (d) Specimen signature card (e) Loan Application
form
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 25 | P a g e
98. What is meant for dormant account?
(a) No operation for six month (b) No operation for one year (c) No operation for two
years (d) No operation for ten years (e) It is an unclaimed account
99. What are time norms for sending the renewal notice for deposit? : (a) Within one month after
maturity date (b) Within 15 days after maturity date (c) one month before maturity date (d)
15days before maturity date (e) Need not be sent
100. Whether we can open a current account in other banks name?
(a) Yes we can open (b) No we cannot open (c) With RBI permission (d) With
Circle Office permission (e) With Head Office permission
101. How many risk categories are there for casa account?
(a) 0 (b) 1 (c) 3 (d) 5 (e) 6
102. Who are covered under low risk category? : (a) All salary class, government staff, MNC
employees (b) Accounts with less than RS.500/- balance (c) Accounts of PEP, HNI
customers (d) All of the above (e) None of above
103. Who are covered under medium risk category?
(a) Accounts with less than Rs.100000/- balance (b) ALL HNI, NRI customers (c) All
borrowers (d) All depositors (e) None of above
104. Who are covered under high risk category?
(a) Trust, charitable institutions, NGO, association, etc. (b) Diamond, bullion dealers (c)
Brokers, dealers (d)Politicians (e) All the above
105. What is meant by KYC? :(a) Know your country (b) Know your client (c) Know your counter
(d) Know your currency (e) Know your Customer

TEST YOURSELF DEPOSITS - ANSWERS

1b 2d 3a 4c 5a 6d
7e 8a 9c 10 b 11 b 12 c
13 c 14 c 15 a 16 b 17 e 18 c
19 c 20 b 21 d 22 a 23 e 24 b
25 d 26 b 27 e 28 e 29 a 30 a
31 b 32 e 33 b 34 a 35 d 36 c
37 d 38 c 39 b 40 b 41 e 42 d
43 e 44 e 45 e 46 e 47 b 48 e
49 b 50 b 51 c 52 d 53 c 54 d
55 b 56 d 57 d 58 a 59 a 60 c
61 c 62 c 63 d 64 d 65 d 66 a
67 c 68 b 69 e 70 c 71 a 72 a
73 b 74 b 75 c 76 a 77 d 78 e
79 c 80 b 81 d 82 d 83 a 84 d
85 b 86 a 87 c 88 e 89 e 90 a
91 d 92 b 93 a 94 c 95 a 96 d
97 b 98 c 99 d 100 d 101 c 102 a
103 b 104 e 105 e

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 26 | P a g e
 3. GENERAL BANKING
Demand Drafts

 With the introduction of CTS 2010 STANDARD Single Colour DD (in place of 4
Colour DD), restriction of issue of DD for Rs.10 Lac by Rural/Semi Urban
branches stands removed.(Memo 75/2013)
 Special assistants are authorised to sign DD upto 250,000/-
 DD for 21 Lac above should be signed jointly by two officers who are authorised
signatories
 BS& CA Section, HO can permit issue of DD for 21 crore and above favouring
Commercial Bank, Financial Institutions, Central and State Government
Departments.
 Cancelled DD are to be kept in file for verification by inspecting officer – may be
effectively destroyed
 DD for 21,000/- and above paid in cash and DD for 25,000.- received in
clearing/transfer should be screened in ultra violet lamp
 Verification of DD by two officers for DDs of 21 lakh and above
 Duplicate DD is issued within a fortnight from the receipt of such request
 After 15 days interest payable to purchaser of DD at the rate applicable for the Fixed
deposit
 Branches may obtain simple undertaking letter and issue Duplicate DD – upto
2500/- in case of non account holders and upto 25,000/- in case of account
holders
 DD is valid for 3 months (w.e.f. 01.04.2012) and can be revalidated within six month
from the date of issue.
 Revalidation permitted only once and for 3 months.
 DDs which have completed 6 months from the date of issue are not eligible for
validation.
 Teller is permitted to issue DD against cash and transfer upto and inclusive of
215000/-
 Account Payee Cheques: Banks may consider collecting Account Payee
cheques drawn for an amount not exceeding 250,000/- to the account of their
Customers who are Co-operative Credit Societies, if the payee/s of such
cheques are the constituents of such Credit Co-operative Societies. This
relaxation will continue as hitherto, subject to the conditions outlined in our
Circular No. 373/2010 dated 03.11.2010. (Cir 337/2011)
 Demand Drafts of 220,000/- and above should be issued with account payee
crossing only.
 DD cancellation/Revalidation/duplicate issue charges: 2100/-,. If value of DD is less
2500/-, 220/- per instrument.
 A flat charge of 220/-per D.D if the DD is taken for educational/examination
purpose subject to the DD amount being maximum of 25000/-Irrespective of
cash DD. Above 25000/-DD – normal applicable DD charges apply.
 All branches are required to pay DDs at their end itself (CBS Option 8310) and
need not send the instruments to Accounts Section/Drawee branches.(Cir
317/2011)
 DD Drawn advice dispensed with.
 Branch Manager can permit waiver of DD issuance charges for Current Account holders
maintaining monthly average balance of 21 Lakh and above in multiple of 21 lakh.
Waiver will be equivalent to average monthly balance in the preceding
month.(Cir/381/2014)

DD drawing arrangement permitted to our RRBs on our branches/Offices (Cir

215/2010, 141/2013, 165/2014)
 Our bank has permitted our RRBs to draw DDs on all the branches of Canara Bank in
the respective state of RRB functioning ie., Karnataka & Kerala.
 A ceiling of `10.00 lakhs per DD, per Party, Per day is fixed to RRB branches for
issue of DDs on Canara Bank Branches/Offices.
 The RRB branch to inform the drawee Branch of Sponsor Bank the full details of DDs
issued.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 27 | P a g e
 Raising of BAR on payment of RRB DDs on Nodal Branches is dispensed with as CBS
system will debit the DD amount online to the current account of RRB at Nodal branch
and ensure instantaneous reconciliation.
Pay Order

 Issue of PAY ORDERS is dispensed with, Bank can issue DD drawn on self,
payable at any other branch.
 Section 31 of RBI Act prohibits issue of Banker‘s Draft/pay order payable to bearer on
demand.
 PAY ORDERS ARE NOT COVERED BY SECTION 85 A AND 131 A OF NI ACT. PAYORDER
IS NOT A NEGOTAIBLE INSTRUMENT
Branch Advice(Cir 193/2011, 559/2013): Branch advices should not be issued for `20/- and
less if the amount is meant to the credit of the customer/employee. Printing of Branch Advice
discontinued in CBS.
CHEQUES WITH CTS SPECIFICATIONS (272/2011)
The salient features of cheque books as per CTS standard are hereunder.
Watermark in Cheque Paper :In CTS, in addition to our bank watermark, a standardiRs.ed
watermark, with the words ‗CTS-INDIA‖ will appear in all the cheque leaves. This watermark
will be in oval shape with diameter 2.6 to 3.0 cms. As such both the water marks ie., our
Bank water mark and CTS water mark will be available in all CTS cheque leaves which can be
seen when held against any light source.

 VOID pantograph: Pantograph with hidden/embedded ―VOID‖ feature shall

be included in all cheques. The feature will not be visible in scanned image at
the resolution specified in CTS but will be clearly visible in photocopies and
scanned colour images. This would act as a deterrent against colour photocopy
or scanned colour images of a cheque.
 Bank‘s logo printed with invisible ink (ultra violet ink): Bank‘s logo will be
printed in ultra violet (UV) ink on the top of the cheque, after the branch
name. The logo will be captured by / visible in UV enabled scanners / lamps. It
will establish the genuineness of a cheque.
 Field placements of a cheque: Placement of significant fields on the cheque forms
are now mandated. Sample cheque leaves are enclosed herewith to enable the
branches to understand clearly the placements of each field like date, amount,
branch name, IFSC code etc.
 Micro-lettering : Micro-printing is a line of text that is so small that it
appears as a solid line. All the three solid lines appear in our CTS cheques
are micro printed (in tiny fonts) with our bank‘s name in continuation
ie.CANARABANKCANARABANK . This is not easily visible/recogniRs.able
without the use of a magnifying glass. In addition to this, back ground
printing of our Bank‘s name is available in each cheque as is being done
hitherto.

CTS-2010 STANDARDS(Cir 323/2012, 502/2013)

 Replacement of post dated non CTS-2010 standard cheques issued by borrowers

with CTS-2010 Standard Cheques for the purpose of repayment of loans.
 No charges for CTS 2010 standard cheques to SB account holders for the first time as
per RBI directives dated 18.03.2013
 Clearing arrangement for Non-CTS-2010 will be done away with in a phased
manner

In case of Cash and transfer instruments the images have to be sent to the Departments Cash
(Manual Updated Till 31.12.2010, 237/2011)

 Currency of below 250/- and coins to be kept in Single Lock

 Single lock key to be kept by the staff handling cash
 Cash received on account of recovery/deposits on NPBW days may be accepted and
treated as late cash
 It is the responsibility of the concerned supervisor to verify the cash cheques inclusive
of cash DDs of 21000/- and above under ultra violet lamp

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 28 | P a g e
 Managers are empowered to permit payment of Self cheques to the drawer
only even after business hours but within working hours upto a maximum of
210000/- per party
 21000/- denomination notes should be counted by an officer
 Where the shortage is 210000/- and above, investigation has to be conducted
by an officer appointed by the concerned DGM/GM and appropriate action to be
taken.
 Where the shortage is 22500/- and above but less than 210000/-, discretion to DGM
for conducting investigation
 Cash shortage is more than 225000/- and is permitted to be recovered in
installments, the employee may not be allowed to work in cash department
for a year or so long as the amount of shortage is not fully paid whichever is
later
 All cases of cash shortages involving more than 25000/- detected by Managers
and Inspectors(which was not informed by cashier), shortage of 210,000/-
though informed by cashier have to be reported as cases of frauds to R & R
section, Vigilance Wing, HO with a copy to R&L Section of Circle Office
 Excess cash – claim by remitter –can be paid by Manager upto 2500/-. Above that, the
claim should be passed by referring to HRM, CO.
 For claim above 25000/- stamped indemnity ( for non customers)
 At the end of the financial year, excess cash to be transferred to commission
account
 Remittance by insured post - maximum 210000/-
Transmission of cash

 Sub-staff – upto 25000/

 Upto 225000/- by a person not below the rank of clerk.
 Above 225000/- by a person not below the rank of clerk and at least one more
employee to accompany him. For remittance upto 220 lakhs – no armed
guard.
 Above 220 lakhs upto 250 lakhs should be accompanied by one armed guard
 Above 250 lakhs , atleast two armed guards

Reporting of inward cash remittance –weekly by way of enclosure to RBI

 Small branch - 21 lakh and above

 Medium branch - 25 lakh and above
 Large branch – 210 lakh and labove
 VLB and ELB are exempted from this instructions
 Insurance Cover for Money and Securities held at branches/offices – 230 crores for the
year 2014-15
 Insurance Cover for Money and securities in transit – 25 crores
 Insurance cover for ATM cash: 220 lakhs
Insurance cover for unauthoriRs.ed withdrawal from ATM : 250,000/-
 Insurance for loss or damage to ATM : `25 lakhs  Mutilated note – cut into 2 or
more pieces  Standard Cash limit is fixed by CO

 Detection, Impounding, reporting of fake Notes and filing of FIRs (HO Cir
396/2014, 452/2015)
  Each banknote, which, on examination of various security features
/parameters, is determined as a counterfeit one, shall be branded with a
stamp" COUNTERFEIT BANK NOTE". For this purpose, a stamp with a uniform
siRs.e of 5 cm x 5 cm may be used.
  These Counterfeit Notes at branches (returned by police after investigation)
should be subjected to verification on a half yearly basis (on 31 st March and
30 th September) by the Officer-in- Charge of the branch concerned. These
Counterfeit Notes should be preserved for a period of three years from the
date of receipt from the police authorities.
  Counterfeit Currency Reports(396/2014):Branches and Currency Chests are
required to submit Counterfeit Currency Reports (CCRs) within 7 days from the
date of detection of counterfeit currency note/s. Counterfeit currency detected

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 29 | P a g e
 in the soiled notes is also to be reported in the CCR.
  Filing of FIR on detection of Forged / Counterfeit Notes above 4 pieces in a single
transactions is mandatory.

 Withdrawal of Bank Notes issued prior to 2005(Cir 18/2014, 126/2014,

06/2015,59/16)

  Date for exchanging the pre-2005 banknotes has been extended up to 30th
June 2016 and that the notes can be exchanged only at identified branches of
the Bank.
  Bank notes issued prior to 2005 do not have on them year of printing on the
reverse side.
  Branches to sort such notes and remitted to Currency Chests.
  Currency Chests to withdraw all notes issued prior to 2005 for onward
transmission to Reserve Bank of India.
  Bank notes printed prior to 2005 continues to be legal tender.

 LiberaliRs.ed definition of Cut Notes & Soiled Notes (Cir.298/2010, 237/2011)

  Single numbered notes – `1/-, `2/- & `5/-: Note presented should not be in
more than two pieces. No essential feature of the note should be missing and
complete number should be available in an undivided area on one of the pieces.
Both the pieces should be of the same note.
  II. Double numbered notes–`10/-,`20/-,`50/-,`100/-,`500/-& `1000/-: The
note presented should not be in more than two pieces. No essential feature of
the note should be missing. Both the pieces should be of the same note. The
above types of notes will be treated as soiled notes and be kept along with
soiled notes.
  Mutilated Notes – Presentation and Passing: (Cir.298/2010,
237/2011): A mutilated note is a note of which a portion is missing or which is
composed of more than two pieces. Mutilated notes may be presented either at
designated bank branches of commercial banks. Mutilated notes so presented
may be passed as per the Rules framed under Reserve Bank of India (Note
Refund) Rules2009.
 "Star Series" Banknote:
RBI has adopted the "STAR series" numbering system for replacement of
defectively printed banknotes, at the printing presses. To begin with, this will be
for banknotes of `10, `20 and `50, `100 denomination. The Star series banknotes
are exactly like the existing Mahatma Gandhi Series banknotes, but have an
additional character viRs.., a *(star) in the number panel in the space between the
prefix and the number. The packets containing these banknotes will not, therefore,
have sequential serial numbers, but contain 100 banknotes, as usual. To facilitate
easy identification, the bands on such packets clearly indicate the presence of
these banknotes in the packet.

Commission In Respect Of Government Business (Cir 212/2012)

For Physical Receipts `50 per challan / transaction

For e mode Receipts `12 per challan / transaction
For Pension payments `65 per transaction
For other payments 5.5 paise per `100/- turnover

Doorstep Banking Scheme(Cir 567/2013, 70/2014, 516/2014, 692/2014)

 Tag Line: "Why go to the Bank? Let the Bank come to you."
 Cash pick up / delivery – Minimum amount – Rs. 1 lac & Maximum: Rs. 100
lacs per day available on all working days except saturdays
 For all KYC complied Cu stomers.
 Maintenance of average balance of Rs. 2 lacs. Services available within city /
Municipal limit upto 15 km
 Service extended through Service Provider.
 PAN In dia coverage
Pensioners of age 75 years and above are also eligible under PART A of the scheme. For availing the
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 30 | P a g e
facility under PART B of the scheme, there is no age limit for pensioners.
 PART A- Delivery of cash with a minimum of Rs.5000.00 and maximum of Rs.50000.00
subject to ceiling of monthly pension.
 PART B- Hospitalisation expenses for pensioner or spouse can be paid in cash upto Rs.50000.00 to
the reputed hospital.

Banking Codes And Standards Board Of India (BCSBI):(Cir no.230/2007)

 BCSBI is a registered society and our bank is a member of it - Formed on the
recommendations of committee on Procedures and Performance Audit on Public
Services TaraporeCommittee).
 Voluntary Code
 Chairperson of BCSBI – A. C. Mahajan
 Branches offering AWB services should credit outstation instruments drawn on AWB
branches, on the same day
 Instant Credit: Upto `15,000/- for parties having satisfactory dealings for 6
months. OSCs without request of party and Clearing cheques with request of
party
 In case of cheque return (ICDB) interest chargeable is from the date of
RETURN of such cheque till recovery. ROI : Applicable to customer‘s other
limits for ROI applicable upto `2 lacs ie Base Rate

 High value clearing cheques ie `1 lac and above shall be credited on same day
 OSC normal period: Metros – 7 days, Metros to State Capitals(other than NE states) –
10 days and other centres – 14 days.
 Delay upto 14 days, SB rate of interest, beyond 14 days – term deposit rate and
beyond 90 days – 2% over TD rate of interest(253/2009)
 OSC lost in transit, interest payable for 15 days at SB rate
 ICDB cheques credited to OD/OCC, returned unpaid – Rate of interest : 2% above
applicable rate of OD/OCC from date of credit, till reversal.
 Branch manager will be responsible for the resolution of the
complaints/grievances in respect of customer‘s service by branch
 Customers‘ Day : 15th of every month. Branch in charge should present between 3pm
and 5 pm.
 7 days time for grievance of complaint in case of Branch/CO/HO each
 Redressal of complaints – Adopted by our Bank : General complaints -21 days,
RBI,MPs,VVIPs – 15 days, PMS office – 7 days
 If any cheque paid after stop payment instruction, bank has to reverse the entry within
2 working days
 Normally customers have to be contacted between 07-00 hrs and 19-00 hrs. Retail
Customers at residence and Business/Residence in case of others

Internal Banking Ombudsman(Chief Customer Service Officer)(Cir 441/2013)

 As per Domodaran Committee recommendation.

 Reports directly to CMD of bank.
 The internal Ombudsman is retired Chief General Manager from other bank, who has a
vast experience in the operations of the Banking Industry.
 Complaints which are outside the purview of the Banking Ombudsman Scheme can
also be dealt by the CCSO.
 The CCSO shall not entertain and examine first resort complaints. After one
month of complaint aggrieved can approach to CCSO.The CCSO will resolve the
grievances within 30 days.

Customer Service Related(From RBI Master Circular)

 Customer Service Committee of the board will include: Experts and

representatives of customers as invitees to enable the bank to formulate suitable
policies.
 Standing Committee on Customer Services is recommended by CPPAPS
(Committee on Procedures and Performance Audit of Public Services). The
standing committee may be chaired by CMD or ED and including non officials as

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 31 | P a g e
 its members.
 Branch level customer service committee: should include customers especially
Senior CitiRs.ens. They should meet once in a month ( preferably on 15 th ).
Branch level committees should submit quarterly reports to Standing Committee
on Customer Service.
 As per RBI guidelines, banks are required to put the following policies in place for
customer service
o Comprehensive Deposit Policy
o Cheque Collection Policy
o Customer Compensation Policy
o Grievances Redressal Policy
 Banks Local Authorities and Government Departments are exempted from PHOTO.
 Public Sector Undertakings and Quasi Govt. Bodies, Purdanishin must give
photographs.
 Two photographs are required as per RBI guidelines.
 Photograph of all the depositors is required for all types of deposits : Fixed,
Cumulative, Recurring etc.
 Photograph of guardian should be taken in Minor Accounts.
 If minimum balance is changed by the Bank, it should be informed to Customer ONE
MONTH in advance.
 Customer is eligible for one pass sheet per month for free of cost(Even if pass book is
given)
 Govt. of India has accepted SAKA SAMVAT as National Calender with effect from
22-03-1957. An instrument written in Hindi having date as per Saka Samvat
calendar is a valid instrument.
 Payment of Interest on Fixed Deposits: If deposit is less than 3 months,
interest should be paid for the actual number of days, reckoning the year as
365 days.
 Bank has no discretion to refuse pre mature withdrawal of term deposits for individuals
and HUF.
 Whenever addition or deletion of names are taking place in joint account, the amount
or duration of original deposit should not undergo any change.
 Opening of Current Accounts: Where the account holder is enjoying credit
facilities with other banks is not permitted by RBI. NOC is required from the
other bank. If NOC is not given, bank can send a letter to other bank and wait
for 15 days. If no response is there, we can open.
 Reconciliation of Transactions at ATM failure: 7 days from the date of receipt of
customer complaint. Compensation: `100/- per day. Compensation should be paid
without customer‘s claim.
 Commencement of employees working hours: 15 minutes before
commencement of business hours.(Goiporia Committee)
 Banks should extend business hours for banking transactions other than cash, till 1
hour before closure of working hours. (eg. Issue of pass book, issue of cheque book
etc.)
 May I help you counter is exempted for very small branches.
 Comprehensive Notice Board should have minimum 2 feet by 2 feet and it should give a
comfortable viewing from the distance of 3 to 5 meters.

 Whenever bank prepares booklets or brochures, the minimum font siRs.e should be
Arial 10.
 Banks should make atleast 1/3rd of new ATM s installed as TALKING ATMs with Braille
Key Pads.
 Banks can rely upon Guardianship Certificate issued either by District Court
under Mental health Act or Local Level Committees under National Trust for the
Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation Act 1999.
 For encashment of Drafts: Passport an d postal identification could be
considered as adequate identification. Banks can permit encashment of
drafts upto `25000/- on the basis of above 2 documents.
 Duplicate Draft in lieu of lost draft upto and including `5000/- may be issued without
seeking non payment advice. (with adequate indemnity)
 Banks should issue duplicate drafts within a fortnight from the receipt of

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 32 | P a g e
 request.
 Time frame for collection of cheques drawn on State Capitals/Major Cities / Other
locations to be 7/10/14 days respectively.
 If instruments are lost in Transit /Clearing by the Paying Banker: The onus of
such loss lies with the collecting banker and not the ACCOUNT HOLDER. The
collecting bank should reimburse related expenses plus interest for reasonable
delays and can claim it from the paying banker.
 Payment for interest for delays in Bills: SB rate + 2%. Normal Transit period
: 2 days each for dispatch of bills, presentation of bills of drawees,
remittance of proceeds to the lodger‘s bank, crediting the proceeds to the
drawer‘s account.
 Returning dishonoured cheques: With in 24 hours as per Goiporia Committee.
 `1 crore and above cheques issued by the party returned for more than 4
times: Bank can refuse fresh cheque book + bank can consider closing Current
Account.
 Banks should disclose the following details in financial results as notes: 1.Customer
Complaints, 2.Awards Passed by Banking Ombudsman.
 Where Lockers have remained un operated for more than 3 years for medium
risk customers and 1 year for high risk customer, banks should contact the
customer and advise him to operate or surrender the locker, even if rent is
paid regularly. Banks should incorporate a clause in the locker agreement
that in case locker remain un-operated for more than ONE YEAR, the bank
would have right to cancel the allotment and open the locker, even if rent is
paid regularly.
 Time Limit for settlement of Death Claim: Not more than 15 days.
 Banks are not required to open sealed/closed packets left with them for safe custody
or found in locker while releasing them to nominee/survivors.

Safe Deposit Lockers(Cir no.253/07)

 Relationship - Lessor (bank) and Lessee (customer)

 On the recommendations of Committee on Procedures and Performance Audit on Public
Services (CPPAPS), RBI has issued fresh guidelines
 In case of new parties, 3 years rent + charges for break open of locker in case of
eventuality : to be collected in advance is kept in FDR
 If no operations of lockers continuously for 3 years or more in case of
Medium Risk category and One year in case of High Risk Category customers
- Branches should send notice and break open the locker.
 No nomination facility for Safe Custody Articles held by more than one person

 In case of Locker hired by Jointly with Joint Operations and nomination, if any hirer
dies, access will be given Jointly to survivor and nominee.
 Loss of locker key : Charges: RS.200/- (in addition to actual break open charges)
 Locker Operations : 12 operations free p.a.,
 RS.100/- per operation beyond 12 plus applicable Sertax.
 Charges for delayed remittance of rentals is as per period of delay as per
following chart
Upto and incl of 1 Qtr – 10% of applicable annual rental
Upto and incl of 2 Qtr – 25% of applicable annual rental
Upto and incl of 3 Qtr – 40% of applicable annual rental
Upto and incl of 4 Qtr – 50% of applicable annual rental
1 Yr and above- 100% of applicable annual rental
 This is governed by Transfer of Property Act.
 Straight Through Processing (STP) system between SAFE and CBS-FCR for collection of
locker rent is in place. (HO Cir 210/2014, 114/2015)
 Biometric authentication for Locker access in SAFE module is enabled (HO Cir
325/2014)

Service Tax(Cir 361/2015, 540/2015).

 This is extended to whole of India except J & K State.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 33 | P a g e
 Present rate: 14.50% w.e.f.15.11.2015 . This include Swachh bharat cess which
is 0.50 % . Swachh Bharat cess would be applicable on all taxable commission
and now wef 01.06.2016 – 15% as Kisan Cess – 0.5% added.

Time frame for collection of cheque/instruments sent abroad is as under:

 Personal cheques/drafts payable in the country of currency – 21 days
 Personal cheques/drafts payable in the country other than in the currency of the country – 45
days
 Instruments payable in India – 15 days
Cheque Drop Box Facility(cir 416/09,72/2011) :

 The Box shall be firmly fixed in the wall

 The key be held by a PA holder authoriRs.ed by branch-in-charge
 The duplicate key is to be kept in the double lock
 PA holder authoriRs.ed to operate the Box, shall open on all working days, at
regular intervals depending upon the number of instruments, clearing
arrangement, etc.
 Branch to display on the Cheque Drop Box, the cut-off time for clearance of cheques
for the information
Annual Information Report (AIR)

 Cash remittances into any SB a/c exceeding RS.10 lacs in a year

 Credit Card bills payment of RS.2 lakhs or more in a year
 Receipt towards Bonds/Denentures issued by bank: RS.5 lacs or more
 Receipts of RS.1 lakh or more for shares issued by the Bank
 Receipt towards investment in RBIs savings bonds : RS.5 lacs or more
 Statement for Bank as a whole to be submitted in form 61A duly signed by
CMD.
 Non filing/delay in filing statement attracts penalty: RS.100/- per day delay

Levy Of Service Charges For Outstation Cheque Collection(Cir 289/2008, 93/2011,

193/2013)

Service Service Charges per

Charges per instrument for Other
Value (Rs ) instrument for types of accounts
SBaccounts(Rs (other than SB
) accounts) (Rs )

Up to and including 5000/- 25/- 50/-

Above 5000/- and up to and
50/- 50/
including 10000/
Above 10000/- and up to and
100/- 100/
including 100000/
Above 100000/- 150/- 150/-

 Charges For Intercity Transactions Under CBS Environment – Deposit Of

Cheques At Drawee Centres (Cir 483/2013): NIL Charges
 Sevice charges for speed clearing- Nil Charges ( 483/2013 )
Hitherto, Cheque deposit at drawee centre (i.e Customer having an account in Chennai and deposits a
cheque of Bangalore in Bangalore branch ) was
treated as Outstation cheque collection and OSC charges were collected. The said transaction is
treated now as local clearing and OSC charges are waived for such transaction with immediate effect.
 Service (Processing) charges for Local clearing: (by clearing Houses from
Member Banks). The revised charges as advised by RBI are as under:

Presenting Bank Drawee Bank

Clearing at MICR-CPCs 1.00 1.50

Cheque Truncation 0.50 1.00

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 34 | P a g e
Service charges for return of instruments (cir 193/2013)
Inward Clearing Cheque /Bill: per instrument
 SB: 2250/-, 2250/- , 2250/- (Urban, Rural Other than Individual, Rural)
 CA: Upto 21 lakh: 2250/-, 2250/-, 2250/-
 CA: 2 above 1 Lakh: 2300/-, 2300/-, 2300/-.
Outward clearing instruments:
 SB: 2150/-, 2150/-, 2150/-
 CA/OD/OCC: 2200/-, 2200/- 2200/-
Return Of Outstation Cheques/Bills Received By Branches:
 Cheques: Upto 210,000/-25/-, 10,000 to 21 lakh: 250/- Above 21 lakh: 275/-.

 RTGS Service Charges ( 119/2016) w.e.f. 01.04.2016

 Transaction above 2 2 Lacs & upto 2 5 Lacs:
1. 0800 to 1100 : Nil ,2.1100 to 1300: 227 , 3 1300 to 1630 : 230
 Transaction above 25 Lacs
1.0800 to 1100 : Nil 2.1100 to 1300:252 3.1300 to 1630 : 255

 NEFT Service Charges(Cir 336/2014)

 For Fund transfer upto Rs 10000 : Rs Rs 2.50 per transaction
 For funds transfer Rs 10001to 21 Lakh : Rs 5.00 per transaction
 For Fund transfer above Rs 1to 2 lakh : Rs 15.00 per transaction
 For Fund transfer above Rs 2 Lakh : Rs 25.00 per transaction

PERSONALIRS.ED CHEQUE BOOK(Cir NO.95/2013)

 New and existing operative SB accounts other than ineligible accounts

 Cheque Indent Processing System(CHIPS) should be used by CPC/Branch for
processing personaliRs.ed cheque book request.
 Cheque Book request is enabled through Alternate Banking Channels viRs..,
ATM, Net Banking and Mobile Banking for facilitating the customer.(Cir
644/2013)

Pre-paid payment instruments(Cir 47/2011)

 Pre-paid payment instruments are payment instruments that facilitate

purchase of goods and services against the value stored on such instruments.
 Entities issuing Prepaid Payment Instruments (Other than Banks and Non-
Bank Financial companies) are required to maintain their outstanding balance
in an ‗escrow account‘ with a scheduled commercial bank.

 Branches have to obtain auditor‘s certificate from the entities,

quarterly, certifying that the entity has been maintaining adequate
balances in the account to cover the outstanding volume of payment instruments
issued, within a fortnight from the end of the quarter to which it pertains.

 Branches, where escrow accounts of entities issuing Prepaid Payment

Instruments are maintained /opened, shall record with the Registrar of
Companies under Section 125 of the Companies Act, 1956, the charge of the
holders of the prepaid payment instruments and / or the merchant
establishments on the amount lying in the escrow account.
 All new agreements entered into by branches (including renewals) for
maintaining/ operating escrow accounts of entities issuing Prepaid Payment
Instruments shall incorporate the exclusive clause, as prescribed by RBI, on
the charge of the holders of the prepaid payment instruments and / or the
merchant establishments on the amount lying in the escrow account
 NO interest is payable by the bank on such balances. As an exception to the
this, the entity can enter into agreement with the bank where escrow
account is maintained, to transfer ―core portion‖, of the amount in the
escrow account to separate account on which interest is payable
 This facility is permissible to persons who have been in business for at least
ONE YEAR and whose accounts have been duly audited for the full accounting

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 35 | P a g e
 year.
 NO LOAN is permissible against such deposits. Banks shall not issue any
deposit receipts or mark any lien for the amount held in such form of deposits.

 Income Tax Rates For The Financial Year 2015-16(Cir 447/2014,

292/2015) For Resident Individuals born on or after 01.04.1955
Total Income Tax Rate
Where the total income does NIL
not exceed ` 2,50,000/-
Where the total income 10% of the amount by which the
exceeds `.2,50,000/- but does not total income exceeds `2,50,000/-
exceed `5,00,000/-
Where the total income exceeds `25000- plus 20% of the amount by
`5,00,000/- but does not exceed which the total income exceeds
`10,00,000/- `5,00,000/-
Where the total income exceeds `1,25,000/- Plus 30% of the amount by
`10,00,000/- which the total income exceeds
`10,00,000/-

 All resident individuals born during 01.04.1935 and 31.03.1955 (Senior CitiRs.en)

Total Income Tax Rate

Where the total income does NIL
not exceed ` 3,00,000/-
Where the total income exceeds 10% of the amount by which the total
`3,00,000/- but does not exceed income exceeds `3,00,000/-
`5,00,000/-
Where the total income exceeds
`20000/- plus 20% of the amount by
`5,00,000/- but does not exceed
which the total income exceeds
`10,00,000/- `5,00,000/-
Where the total income exceeds `120000/- Plus 30% of the amount by
`10,00,000/- which the total income exceeds
`10,00,000/-
All resident individuals born before 01.04.1935 (Super Senior CitiRs.en)

Total Income Tax Rate

Where the total incomedoes NIL
not exceed ` 5,00,000/-
Where the total income exceeds 20% of the amount by which the total
`5,00,000/- but does not exceed income exceeds `5,00,000/-
`10,00,000/-
Where the total income exceeds`1,00,000/- Plus 30% of the amount by
`10,00,000/- which the total income exceeds
`10,00,000/-
Quoting of PAN- specified guidelines ( 79/2016)

 Branches should furnish statement in Form no 61 containing particulars of such

declaration through online transmission of data on half yearly basis
 Form no 60 is to be retained for a period of 6 years from the end of FY in which
transaction was undertaken.
 For the declaration in form 60 received from 1st April to 30th September , the
statement in form 61 should be submitted on or before 31st of October and for
the declaration received from 1st of October to the 31st March of the FY , the
statement in form 61 should be submitted on or before 30th April.
 Form no 60 should be kept in safe custody.
The monetary limits for the purpose of quoting PAN are modified w.e.f. 01.01.2016. PAN number
should be quoted in case of
a) Any transactions of an amount exceeding Rs 2 Lacs, regardless of the mode of
payment.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 36 | P a g e
 b) Cash transaction of Rs 50000/- and above.
c) Sale/purchase of motor vehicle ( except two wheeler)
d) opening of an account ( except BSBD) and with the Bank & opening of time
deposit exceeding Rs 50000/- or aggregate to more than Rs 5 Lacs during a
financial year
e) Application for debit or credit card
f) Opening of Demat account
g) Payment in cash exceeding Rs 50000/- to hotel or restaurant against bills at any
one time ,
h) Payment in cash exceeding Rs 50000/- to purchase of units of mutual fund or to
acquire debentures or bonds
i) Payment in cash exceeding Rs 50000/- in connection with travel to any foreign
country
j) Payment in cash exceeding Rs 50000 for purchase of DD during any one day
k) Payment for one or more pre paid payment instrument ,in cash or by
DD/PO/Cheque of an amount aggregating to more than Rs 50000/- in a
year
l) Payment as LI premium ,for amount aggregating to more than Rs 50000/- in a
year
m) A contact for sale or purchase of securities : amount exceeding Rs 1 lakh per
transaction
n) Sale /purchase ,of shares of a company not listed : Amount exceeding Rs 1 Lakh
per transaction
o) Sale purchase of immovable property : Amount exceeding Rs 10 lakh
p) Sale /Purchase of goods or service : Amount exceeding Rs 2 lakhs per transaction
 Where a person is a minor and does not have any income chargeable to tax , he shall
quote the PAN of his father /mother
 The provisions of this rule shall not apply to Central Government ,State Government
and Consulate Offices
 Obtain Form 60 along with documentary proof , if person does not have a PAN
 The branches are required to obtain PAN or form 60 (revised) along with documentary
proof. Documents to be submitted for proof of identity and proof of address along with
form 60.

Prevention of Accidental Firing of Gun(cir 229/2008)

 Armed guard should attend one training programme in a year. There should NOT be a
gap of more than 15 months between 2 trainings.
 Guns which are 10 years old are to be inspected and should be serviced once in 6
months.
 More than 20 years old Guns should be replaced.

Burglar alarm system. (cir 286/2008)

 Branch managers should check the burglar alarm system DAILY for
serviceability and set the appropriate mode.

Some Important Matters:

1. A Banking transaction in a branch costs between RS.35 and RS.40, at ATM
between RS.15 and RS.30, Mobile Phone transaction would cost about RS.2-5.
2. Phising refers to a phenomenon in which the customer gets an e-mail that
deceptively claims to be from the bank and asks for account related
information, Credit Card particulars, Pass words and PIN.
3. As per Supreme Court Judgement, even if the guarantee is revoked before the
loan amount is disbursed, the defaulted amount will have to be paid by the
guarantor.

Currency Chest Transactions

Levy of Penal Interest for Delayed Reporting / Wrong Reporting / Non-Reporting of

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 37 | P a g e
 Currency Chest Transactions and Cases involving Shortages/Inclusion of
Counterfeit Banknotes in Chest Balances / Chest remittances. (Cir 239/2009)
 The minimum amount of deposit into/withdrawal from currency chest will be
RS.1,00,000 and thereafter, in multiples of RS.50,000/-.
 Reporting to link offices by chests, by 9 pm. Link Office to Issue Office by
11pm.

 In case re-issuable banknotes are found to be in excess of 5% in any soiled note

remittance, the entire remittance will be returned to the bank at its cost.
 Penal interest is Bank Rate + 2%
 Chest Balance Limit (CBL) as advised by Regional Offices of Reserve Bank of India
may be considered as maximum limit and 25% of the Chest Balance Limit (CBL) in
re-issuables would be the minimum balance that can be held by Currency Chests.

Detection and Reporting of Counterfeit Notes – Introduction of Compensations

and Penalties (Cir 396/2014, 452/2015)
Failure to impound Counterfeit notes will be treated as wilful involvement of the official
concerned in circulation of such notes and penalty imposed by Reserve Bank of India.
 No credit to customer‘s account should be givenfor counterfeit notes received over the counter
or at the back office/currency chest.
 Penalty at 100% of notional value of counterfeit notes, in addition to the
recovery of loss to the extent of the notional value of such notes will be
imposed.

Examination of Banknotes before Issuing over Counters, Feeding ATMs and

Remitting to Issue Offices of Reserve Bank: (Cir.295 / 2010, 161/2012)
 All notes of `100 and above are processed through machines conforming to
‗Note Authentication and Fitness Sorting Parameters‘ prescribed by RBI from
time to time, before issuing them over the counters or through ATMs.
 Each banknote which is determined as a counterfeit one, shall be branded with
a stamp "COUNTERFEIT BANKNOTE". For this purpose, a stamp with a uniform
siRs.e of 5 cm x 5 cm with the following inscription may be used.
COUNTERFEIT BANKNOTE IMPOUNDED.

Preservation of Counterfeit Notes Received from Police Authorities: (Cir.295/2010)

 These Counterfeit Notes at branches should be subjected to verification on a
half-yearly basis (on 31 st March and 30 th September) by the Officer-in- Charge
of the branch concerned. These should be preserved for a period of three years
from the date of receipt from the police authorities.
 The Counterfeit Notes may thereafter be sent to the concerned Issue Office of Reserve
Bank of India with full details.
 The Counterfeit Notes, which are the subject matter of litigation in the court of law
should be preserved with the branch concerned for three years after conclusion of the
court case.
 For cases of detection of counterfeit notes up to 4 pieces, in a single
transaction, a consolidated report as per the format prescribed (242/2011) to
be sent to the Police Authorities at the end of the month.
 For cases of detection of counterfeit notes of 5 or more pieces in a single
transaction, FIR s sh ould be lodged with the Nodal Police Station / Police
Authorities as per ju risdiction, in terms of H.O Circular No. 238 / 2011
dated 02-08-2011.

Canara Public Grievances Redressal System (CPGRS)(Cir 122/2012)

 In order to have effective control and monitoring the grievance redressal

mechanism, in single software, suitable integrated software is the need of the
hour.
 It is internet based online Public Grievance and Redressal System with a facility to
track the status online by our customers/general public.
 DIT Wing has enabled web based package in SINGLE AUTHENTICATION
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 38 | P a g e
 SERVICE (SAS) for the use of HO/CO/Branch users to view/update the interim
reply/action taken in the various stages involved in the subject system. The
same has been enabled in the website (www.canarabank.com) of the Bank for
general public for registering complaints.

Reporting Of Fraud, Theft, Burglary, Robbery & Dacoity (Cir. 336/05, 81/09,
334/10, 345/12, 593/13 ,189/14)

 Branches have to report all cases of actual/suspected frauds immediately on

detection (within 24 hours) as per format to R&L Section, CO.
 All fraud cases are to be reported to Police / CBI within 21 days of their detection as
per guidelines.
 For filing complaint with local police, branches/offices have to necessarily refer to R&L
Section of their respective Circle for permission and guidance.
 For lodging complaint with CBI, Circle Offices have to obtain permission from CMD
by placing an Office Note through Vigilance Section, Vigilance Wing HO.
 In addition to the above, Chief Vigilance Officer (CVO) in consultation with
CMD may refer a case involving less than `.3.00 Crore or a case which cannot
be classified on monetary limits, to the CBI, if, in the opinion of the CVO, the
case is of serious nature and / or has an inter-state or international
ramifications.
 In respect of frauds in borrowal accounts involving an amount of `5.00 lakh and
above, additional information as prescribed in annexure – II as per HO cir 336/2005 is
also to be furnished.
 Negligence and cash shortages: Cases of ‗negligence and cash shortage‘
are to be reported as Fraud if the intention to cheat / defraud is suspected /
proved. However, the following cases where fraudulent intention is not
suspected / proved at the time of detection will be treated as Fraud and
reported accordingly: (a) Cases of cash shortages more than Rs 10000/- and
(b) Cases of cash shortage more than `5,000/- if detected by management /
auditor / inspecting officer and not reported on the day of occurrence by the
persons handling cash.

REPORTING TO RBI:
 Frauds involving `1.00 Lakhs and above.
 Within 21 days from the date of detection in prescribed Fraud Monitoring
Report.
 As per RBI guidelines, reports in respect of all fraud cases are to be submitted
to RBI in the prescribed format within 3 weeks of detection. Delay in reporting
of fraud cases by banks would be liable for penal action prescribed under
Section47(A) of Banking Regulation Act 1949 (cir 16/2011)
Frauds involving `100.00 Lakhs and above.
 Should be reported to RBI within 7 day‘s time from the date of detection by
way of Special letter followed by reporting in prescribed Fraud Monitoring
Report.

Frauds Committed by Unscrupulous borrowers.

 In respect of frauds in borrowal accounts, additional information as prescribed
under part B of FMR I should also be furnished;
 In case of frauds by Advocates, CAs, Bank has to report to Bar Association for
Advocates, Institute for Chartered Accountants for CAs

Cases of Attempted Fraud

 All attempted frauds irrespective of the amount have to be reported by
branches to R&R Section, Technology Risk and Fraud Prevention (TR & FP)
Wing(Earlier with Inspection Wing), HO under advise to the Circle Office.
 All new products/ processes that will be introduced or modified in the bank will
be with the approval of TR&FP Wing which is tasked with the Job of Fraud Risk
Management. The product or process shall be analysed for fraud vulnerability.
For this purpose TR&FP Wing also be a part of S&P Committee.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 39 | P a g e
 All cases of attempted frauds where the likely loss would have been
`100.00 Lakhs or more had the fraud taken place should be placed to audit
committee of Board. Reporting of all attempted fraud to RBI is dispensed
with.

Frauds involving Reporting to RBI & Filing of Police

complaint
Forged instruments Only by the paying banker and not by the
collecting banker
collection of an instrument which is The collecting bank, which is
genuine but the amount is collected defrauded, will have to file fraud report
fraudulently by a person who is not the with the RBI / file a police complaint
true owner (FIR).
Collection of instrument where the Collecting bank who has to file FMR-1
amount has been credited before with RBI (& also file a police complaint)
realiRs.ation and subsequently the as they are at loss by parting the
instrument is found to be fake / amount before realiRs.ation of the
forged and returned by the paying instrument.
bank


 Reporting frauds to police / CBI:

Fraud cases involving amount Reported to
Financial frauds of the value of Senior Officer of the State
`1,00,000/- (one lakh) and above but less CID/Economic Offences Wing of the
than `3.00 crore, which involve outsiders State concerned.
(private parties) & bank staff, should be
reported by Circle Office concerned to
Financial frauds below the value of the local police station by the
`1,00,000/- (one lakh), but above branch concerned
`10,000/-(ten thousand),
All fraud cases of value below `10,000/- (ten Referred to the concerned Circle Office
thousand), involving bank officials by the branch, who would
scrutiniRs.e each case and then
direct the branch concerned on
whether it should be reported to the
local police station for further legal
action.


Fraud cases involving amount Reported to

`3.00 Crore and above CBI
Cases of `3.00 Crore and upto `25 Crore CBI (Anti Corruption Branch)
where staff involvement is prima-facie
evident
C a s e s o f ` 3 . 0 0 C r o r e a n d u p t o ` 2 5 CBI (Economic Offences Wing)
Crore Where staff involvement is
prima-facie not evident
All cases of `25 Crores and above Banking Security and Fraud Cell of
the respective centres, which is
specialiRs.ed cell of the Economic
Offences Wing of the CBI for major bank
frauds.


Attemped Fraud
Fraud cases involving amount Reported to
Likely loss less then `3 Cr Local Police

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 40 | P a g e


Likely loss Rs.3 Cr and CBI

above

Whistle Blower Policy (HO Cir 100/2015):

This Whistle Blower Policy is based on the Government of India Resolution on
―Public Interest Disclosures & Protection of Informer" (PIDPI) in the Bank as
communicated by CVC and also in compliance clauses of listing agreement of SEBI.
The complaint should be in a closed/secured envelope and should be
addressed to the General Manager & Chief Vigilance Officer, (GM & CVO) Vigilance
Wing of the Bank who is the ―Designated Authority". The envelope should be
super scribed with ―Complaint under The Public Interest Disclosure".

REIMBURSEMENTS ON ACCOUNT OF FRAUDULENT/ERRONEOUS DEBITS:

 CO head can permit RS.50,000/- per instrument with maximum RS.2 lacs per
account per party.
 Any claim should be settled within a maximum of 4 months time from the date of the
complaint.
Frauds involving RS.1 crore and above will be investigated by Centralised Investigating
Team constituted by CVO & CMD.

Delay in reporting of frauds: Viewed seriously by RBI/Board. Bank would be

liable for penal action as prescribed under 47A of the BR Act, 1949 and staff
accountability shall be fixed in respect of delays in reporting of fraud cases.

HRD MATTERS
Staff Meeting: Agenda can reflect variety, topicality of issues and branch specific priorities.
Conducting staff meeting on third Friday of every month ismandatory .It may be conducted during
office hours and may stretch beyond office hours at time . Once in a month with agenda decided well
in advance. Expenditure: Rs. 20 /per person, per month/meeting. A goal oriented, target, task
oriented, education oriented meetings.
Job Rotation: Compulsory both at branches and also at administrative units up to II Line Managers.
The Job Rotation should be normally effected once in every six months. The branch in charge,
depending on the size of the branch and departments handled, can have some flexibility regarding the
period. but, the same should not be more than 12 months. This is to ensure smooth change over
without affecting the customer service.

Employees Suggestion Scheme: To put in place system, procedures & reduce risk to inculcate
team spirit. All employees of the Bank are eligible to participate.Employees in O&M Section,
Management Audit System, Inspection Wing and their overseeing executives are not eligible. Group of
employees: Minimum 3 and Maximum 5.
Study Circle: Under this forum of Study Circle, important topics can be discussed like Time
Management, Stress Management, Yoga and Meditation, Taxation, Blood Donation, Basel III norms,
Quiz Program, etc. However, care to be taken to see that the topic chosen is interesting one and
kindle desire in the minds of employees and active their thinking process. Periodicity of conducting
study Circle meeting is once in 3 months in case of branch and bimonthly in CO. Topics of
banking/nonbanking will be discussed by inviting a guest speaker who is well versed with the topics.
Honorarium of Rs. 200 can be paid in case of branch having staff strength of less than 50 and Rs.
500 in case of CO/Branch having more than 50 staff strength.

Presentation of Milestone Awards: After completion of 25 years of meritorious service. The cost of
the award should not exceed Rs. 5000/
The award will be presented in the monthly staff meeting. Award may be presented during the staff
meeting of April / October – Every Year

Canteen Subsidy: All branches, irrespective of the staff strength, are eligible for canteen subsidy.
The Subsidy amount at the rate of Rs 75/per month, per employee shall be released by the Bank to
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 41 | P a g e
the caterer directly (w.e.f. 1/9/2012).
Festival Advance to Employees: Rs. 30,000/for Officers, Rs.20,000/for Clerical Staff,
Rs.15,000/for Subordinate staff
Livery To Subordinate Staff: Ceiling limit for providing livery to all subordinate staff including Part
Time ,Employees on Scale Wages is enhanced as follows: Terry cot Livery : Rs. 2,500/for 3 sets once
in 2 years[existing limit Rs.2000 /Woollen livery : Rs. 2,500/for 1 set once in 3 years[existing limit
Rs.2000 /The above limits will be effective from 01.12.2011
Incentive Scheme to Honor Alert Staff:
 Upto Rs.10000/- : Cash Award Rs.500/- + Appreciation letter – CO Head
 Rs .10001/- to Rs.1 Lac – Cash Award upto Maximum of Rs.2000/- + Appreciation letter by
CO Head
 Rs .100001 to Rs 5 lac - Rs .7000/- + App. Letter by ED
 Rs .500001 and above - Rs .10,000/- + App. Letter by CMD
Withdrawals in Employees Accounts Authorization : Upto Rs.5000/by supervisor, Upto
Rs.10,000/by officer ,Above Rs.10,000/by Manager/Sr.Manager, In extension counters, official in
charge can authorize above Rs.5000
Mandatory Leave(Cir 642/2013)

 All members of the staff will have to compulsorily avail leave for at least four continuous days
in each calendar year against leave standing to their credit and after obtaining regular
sanction thereof from the competent authority.
 The branch head / Manager (Administration) shall ensure and confirm that the password of the
employee thus going on leave has been disabled during the period of leave.
 The employees shall plan their leave taking in such a way that the same shall not affect the
smooth functioning of the branch/ office.
If any employee is not taking "4 days of Continuous " leave for any reason, branches/offices instead
of insisting the employee to go on leave, shall report names of such employees to inspecting officials
during the inspection of branch/office, who in turn have to comprehensively examine the decision
taken/transaction put by such employees. The findings thereon shall be documented in a separate
section of the Audit/Inspection Report.
Sabbatical Leave Scheme (Box Item 92/2006, 235/2000, 20/2000,157/2012)
~ Purpose:
1. For prosecuting higher studies both inland as well as abroad.
2. Health grounds of self / dependent family members.
3. Joining the spouse
4. Taking care of the family or children.
~ Eligibility: Employees who have put in 5 years of active service & Confirmed
employee(Relaxation can be permitted)
~ Period of leave: Minimum period of leave – 1 years at a time continuously and can be extended
upto 2 years. Number of
occasions leave can be availed shall be restricted to 2 times in the entire service of the
employee subject to a maximum of 2 years. Before expiry of sanctioned leave, employees
cannot rejoin duty.(For women employee minimum period is 3 month)
~ For outside employment, prior permission from Competent Authority is to be obtained.
~ Employees who intend to avail leave under this scheme shall submit an application with other
undertakings to the GM, HR Wing and shall give 3 months notice.
~ In the case of woman employees, this can be availed as an extension of Maternity leave even
though minimum stipulated service of 5 years is not completed.
Paternity Leave
With effect from 01.06.2015, male officer employees with less than two surviving children shall be
eligible for 15 days paternity leave during his wife's confinement. This leave may be combined with
any other kind of leaveexcept casual leave. The leave shall be applied upto 15 days before or upto
6 months from the date of delivery of the child
Special Sick Leave
With effect from the 01.06.2015, Special Sick Leave up to 30 days may be granted to an officer
employee once during his/her entire period of service for donation of kidney/ organ

Banks New Brand Identity Standardization of Business Cards:

(Cir. 132/2008)
Size 55mm x 90 mm

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 42 | P a g e
 Paper quality 300 gsm Lycum Mat Finish Art Board or equivalent

Colours Canara Bank Blue (100% Cyan) Canara Bank Yellow

(0C 25M 100Y 0K) Black.
Bank name Two colour logo on a white background. It should
with logo be placed at the top-right corner.
Printing DIGITAL printing for GMs / Circle Heads & SCREEN printing for
other executives / eligible officers
Eligibilit y Scale I officers heading branches // All Managers
/ Senior Managers // Scale I officers
drafted/designated for Marketing // Public
Relations // Deputation to other Institutions
Minor Penalties:
(a) Censure;
(b) Withholding of increments;
(c) Withholding of promotion;
(d) Recovery from pay or such other amount as may be due to him of the whole or part of any
pecuniary loss caused to the bank by negligence or breach of orders;
(e) Reduction to a lower stage in time scale of pay for a period of not exceeding 3 years,
without cumulative effect and not adversely affecting the officer’s pension.

Major Penalties:
(f) Save as provided for in (e) above, reduction to a lower stage in time scale of pay for a
specified period with further directions as to whether or not the officer will earn increments of
pay during the period of such reduction and whether on expiry of such period the reduction will
or will not have the effect of postponing the future increments of his pay.
(g) Reduction to a lower grade or post
(h) Compulsory retirement
(i) Removal from service which shall not be a disqualification for future employment.
(j) Dismissal which shall ordinarily be a disqualification for future employment.

Canara Bank Officers’ Service & Regulations 1979

Regulation no & Details
15 Probation: Direct Recruit – 2 years, Promoted officer – 1
year
24 Medical Aid: May accumulate unavailed medical aid so as
not to exceed 3 times the maximum amount.
32 Casual Leave: 12 days in a year. Availment maximum 4
days at a time.
Privilege Leave: Eligible for PL of one day for every 11
days of service on duty. No PL may be availed before
completion of 11 months of service on duty. Accumulation
of PL not more than 270 days except where leave has been
applied for and it has been refused. Notice of not less
than 15 days required for PL. Encashment of Privilege
Leave shall be restricted up to a maximum of 240 days.
34 Sick Leave: Eligible for 30 days sick leave for each

completed year of service, maximum 18 months or 540 days

on production of medical certificate. SL will be on half
pay payable, commutation of SL with full pay permissible.
35 Additional Sick Leave: Eligible after completing 24 years
of service one month for each year of service in excess of 24 years subject to
a maximum of 3 months.
36 Maternity Leave: At a time – upto 6 months on any
occasion. Not more than 12 months during the entire
service.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 43 | P a g e
37 Compulsory Availment of Leave: All members of the staff
will have to compulsorily avail leave for at least four
continuous days in each calendar year against leave
standing to their credit and after obtaining regular
sanction thereof from the competent authority.
38 In case of Casual Leave & Privilege leave upto 3 times, if
the concerned sanctioning authority is not taking a
decision within stipulated time as mentioned above, the
HRMS leave package will automatically approve such leave
requests after completion of five working days from the
starting date of leave availment.

Acceptance of Gifts : (Canara Bank Officer Employees’ (Conduct) Regulations – 1976)

On occasions such as marriages, anniversaries, funerals or religious functions when the making
of gifts is in conformity with the prevailing religious or social practice, an officer employee may
accept gifts from his near relatives but he shall make a report to the competent authority if the
value of the gift exceeds 2500/- .
On such occasion as specified in sub-regulation (2) an officer employee may also accept gifts
from his personal
friends having no official dealings with him but he shall make a report to the competent
authority if the value of such gift exceeds ?200/-.
In any other case, the officer employee shall not accept any gifts without the sanction of the
competent authority if the value of the gifts exceeds ?75/-.
Provided that when more than one gift has been received from the same person or concern
within a period of 12 months the
matter shall be reported to the competent authority if the aggregate value thereof exceeds
?500/-. Note: As a normal practice an officer employee shall not accept any gift from any
person or institution having Official dealings with the officer employee.
Transactions exceeding 225000/-: (Cir. 302/2006)
As per Regulation 20(4) of Canara Bank Officer Employees’ (Conduct) Regulations 1976: Every Officer
employee shall report to the competent authority every transaction concerning
movable property owned or held by him either in his own name or in the name of a member of his
family, ;if the value of such property exceeds `25,000/-.
All officer employees are requested to report transactions as above within 30 days of such transaction
to the Competent Authority.
Movable, Immovable and Valuable Property: (Cir.124/1993, 61/2004):
In terms of Regulation 20(2) of Canara Bank Officer Employees’ (Conduct) Regulations, 1976,
every officer employee shall every year submit a return of his movable/immovable and valuable
property including liquid assets like shares, debentures as on 31st March of that year to the Bank
before 30th June of that year.
Erosion of Income : Action against the Erring Employees: (As per Interest collected,
commission manual updated till 30-11 2003)
~ Income leakage upto `5000/- and when it is recovered, no letter need be addressed.
~ If Income erosion is more than `5000/- and less than `10,000/- (if the amount is
recovered)
~ 1st instance : Advisory Letter
~ 2nd instance : Advisory Letter (irrespective of amount
ie even less than `5000/- also)
~ 3 rd instance: Caution letter and entry in the service record
~ 4th instance : Disciplinary Action
`10,000/- and Above upto `25,000/- (even if the amount is recovered)
~ 1st instance : Advisory Letter
~ 2nd instance (irrespective of amount) : Caution Letter
~ 3rd instance : Disciplinary Action
Above `25,000/- (even if the amount is recovered)
~ 1st instance : Caution Letter
nd
~ 2 instance (irrespective of amount) : Disciplinary Action

10th Bipartite Settlement – Duties & Resonsibilities of Special Assistants (BI

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 44 | P a g e
 No.75/2010, 70/2010, 323/2015 )
 Special Assistants and Temporary Supervisors shall pass independently, manually or
online, cash instruments upto `50,000/- and clearing and transfer cheques, vouchers
etc., [whether debits or credits] upto and including ` 1,50,000/-.
 Passing will include verification of signatures and scrutiny as to the correctness of
endorsements on and other particulars of such instruments.

 There shall be no limits for verification of signatures, passing of authenticated credit

vouchers / entries and for verifying authenticated vouchers in the ledgers, books, computer
print-outs etc.’

 Special Assistants shall count currency notes upto and including the denomination of ?500/-.
 It was agreed to deploy the services of Special Assistants in other departments such as
bills, clearing, advances etc
Introduction of Cheque System for Payment of PF Settlement
 Branches not to keep cheque for more than 15 days with them (cir 329/2010)
 Gratuity amount sanctioned upto ?10.00 lakhs (present ceiling) under the Act is not taxable
(cir 330/2010)
 In case Gratuity cheque is not delivered to ex employees for any reason, it has to be
returned to HO immediately after 15th day. Branches not to keep cheque for more than 15
days with them.
Canara Bank Employees’ Pension Regulations, 1995
 Acceptance of VRS, Sanction of Pension: :Workmen: AGM/DGM of Circle. Officers in Scale, I,
II & III & Executives in Scale IV, V – General Manager, HR Wing Scale VI : ED., Scale VII:
CMD ( Cir 12/2014 )
 If a pensioner who immediately before retirement was holding the post of an officer and
wishes to accept any commercial employment before the expiry of one year from the date of
his retirement , he shall obtain the previous sanction of the Bank to such acceptance .(
243/2014 )

Scheme for Extending Cashless Facility for Hospitalisation to Our Employees (cir
87/2011)
 The Bank will enter into a tie-up arrangement with reputed hospitals for cashless facility
in the matter of treatment of our employees and their dependants as inpatients
 An employee entitled to get himself / his dependents admitted to any of the empanelled
hospitals for treatment of any illness/ disease requiring hospitalization without payment of
any initial admission fees.
 Immediately on discharge and on submission of the bills as per the procedure through
HRMS package, the respective HRM Section shall sanction the eligible amount as per his
eligibility under the Bipartite Settlement/ Joint Note and make payment to the concerned
hospital as per their bills within thirty days from the date of receipt of bills by the Bank
 In case the eligible amount sanctioned to the employee is less than the bill submitted, HRM
Section shall debit the employee’s account to that extent and remit the total amount to the
hospital

 While requesting for availing the cashless facility for Hospitalisation, the employee shall give
a letter of undertaking that, he shall immediately make available the funds for the excess
amount payable by him over and above
his eligibility as per the Bipartite Settlement / Joint
Note in his operative account and authorize the Bank to debit his account to that extent and
remit the amount to
the Hospital as per the bills submitted by the Hospital and it is the responsibility of employee
to provide funds in the a/c.
 The HRM Sections at Circle Offices will be the nodal section for this purpose and shall
monitor the empanelment/depanelment of the hospitals and effective functioning of the
Scheme
 As per the MOU the details and cost of the packages etc., shall be provided by the
Hospitals which will be circulated by way of Sectional Circular by HRM Section of the
concerned Circle Office for the benefit of our employees
 It shall be the responsibility of the employee to ensure/satisfy himself about the service
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 45 | P a g e
 provided by the hospital/ its quality and cost involved etc., well before admission to the
hospital.
 Bank shall not be involved in any dispute whatsoever which may arise between the
employee and Hospital for deficiency in service or fee charged etc
 This is a benevolent Scheme for all the employees.
Web Classes to Candidates of JAIIB & CAIIB (BI 20/2011) Institute has recently entered into
an arrangement with Cisco Systems (I) Pvt Ltd for arranging Web enabled classess through their
product called WEBEX. Under this facility, the Institute will video record sessions given by experts
from the field, who have been working as resource persons, and give access to sessions to all the
candidates who register themselves for the above two examinations. It is proposed to offer about
40 hours of video lectures for each subject
Further, the institute will also structure live web classes.
The candidates can access these lessons at their convenience and from their place of choice. This is
similar to having a
private tutor by each candidate provided the candidate has access to computer with net facility. It
is proposed to make this facility available to those candidates who will be appearing for the
examinations to be held in May / June of this year onwards.
STAFF ACCOUNTABILITY IN CREDIT PROPOSALS(Cir 72/2012, 267/2013)
Following four circumstances may emerge in any credit proposal:
a. Deficiencies have been pointed out and the proposal has been recommended by the
recommending authority with justifications.
b. Deficiencies have been pointed out and the proposal has been recommended by the
recommending authority without justifications.
c. Deficiencies have been pointed out and the proposal has NOT been recommended by the
recommending authority.
d. Deficiencies have NOT been pointed out and the proposal has been recommended by the
recommending authority.
In the circumstances described in (a) & (c), generally no accountability shall fall on the
concerned officials who had appraised processed/prepared/recommended the proposal.
However in the circumstances described in (b) & (d) above, accountability shall also be fixed on
the concerned officials who had appraised/processed/ prepared/recommended the proposal.
Generally the accountability shall not be fixed in respect of decision taken by the Credit Approval
Committee or any other committee duly constituted by the Competent Authority, except under
the following cases like:
o frauds committed with the involvement/ connivance of the members of committee;
o decision influenced by personal/ vested interest;
o decision based on extraneous factors not relevant to the business interest of the bank;
o decision tainted with ulterior motive;
o decision which are not bonafide; and
o decision taken under influence/ pressure from outsiders, though such decision is not in the
interest of the bank and in violation/ deviation of the critical mandatory norms which
seriously affects the bank's interest.
In the cases like above the members of such committee shall be accountable collectively as well
as individually.

REIMBURSEMENT OF CONVEYANCE EXPENDITURE IN LIEU OF PROVISION

OF BANK'S CAR - CAR SCHEME FOR BRANCHES(Cir 271/2012) 1.a) Designated
Senior Managers of all ELBs are eligible.
b) Designated Senior Managers of VLBs/FDs, Managers/Senior Managers In- Charge of Branches
and Foreign Departments satisfying the eligibility norms
2. Persons officiating in the above posts, functional Managers in VLBs/ELBs/FDs, II line Managers
at branches and Managers/Senior Managers already provided with Bank’s car are not eligible under
the scheme.
3. Reimbursement of Conveyance expenditure shall be on monthly basis up to the maximum
distance specified, as detailed in the ANNEXURE, on submission of declaration through HRMS
package.
4. Reimbursement will be calculated at the rate of Rs. 7.00 per K.m
5. In view of the introduction of reimbursement facility, no new car will be purchased by the
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 46 | P a g e
 Bank for providing to the branches. The existing cars will be utilized in the following manner.
a. Branches provided with Bank's car and which continue to be eligible under the scheme, shall
retain the car till their redeployment/disposal.
b. In case of branches losing eligibility, cars provided to them shall be redeployed to the newly
eligible branches provided such cars are not deployed otherwise/disposed as per norms.
6. Eligibility as per the norms will be first worked out by respective Circle office basing on the
Business & Growth rate figures of branches as on last Friday of March and a note be placed before
GM/DGM, G A Wing, HO recommending retention/redeployment of cars/sanction of reimbursement
of conveyance.
7. Every year Circle office shall review the car eligibility position of the branches basing on the
figures as on last Friday of the preceding financial year and send the recommendations to
GM/DGM, G A Wing, Head Office.
Scheme for Reimbursement of Conveyance Expenses incurred by award staff in
discharge of their official duties(Cir 386/2013)
All the confirmed clerical and subordinate staff (Sub Staff & House Keeper Cum Peons) owning
a vehicle can claim the reimbursement under ‘Petrol Limit’ on submission of bills up to the
following limit(in addition to the “Transport Allowances” as per provisions of Bipartite
Settlement):
Category Monthly Petrol Limit Consolidated
(Owning Vehicle) Amount per month
in Rs.(Not owning
vehicle)
Special Assistants 13 500
SWO( A&B) 10 400
Sub Staff & HKPs 7 300

Conveyance allowance to deaf and dumb employees (349/2014 )

vehicle can claim The bline and orthopedically handicapped employees are being paid Conveyance
Allowance at 5 % of the Basic Pay ,subject to maximum of Rs 400/-. This benefit is extended to those
employees who have been recruited under Deaf and Dumb category .

STAFF : LOANS & ADVANCES

Staff : Clean loan facility ( Ref. Cir. no.:(268/09, 282/09, 316/09,32/2013)
 All confirmed employees who have completed 3 years of total service.
 The loan shall not be extended to the employee against whom action is pending for major
misconduct.
 Quantum of Loan(Cir 316/09): One and half months gross salary for every completed year of
service with a maximum of 15 months gross salary or the following amount whichever is less:
(a) Officers – Rs.5.00 lacs // (b) Workmen- Rs.3.00 lacs // (c) Sub-staff / PTE - Rs.1.75 lacs
 The amount over and above the existing limit if opted will be sanctioned as DPN only for those
who are presently enjoying OD clean facility.
 Those employees who are having clean DPN loan at present can be sanctioned additional DPN
for enhanced eligibility.
 Repayment: The additional DPN sanctioned is repayable in 120 EMI. Wherever the service of
employees is less than 10 years EMI as applicable to 10 years may be permitted with an
undertaking from the employees to clear the above balance outstanding out of terminal
benefits.
 The NTH should be not less than 40% of the Gross emoluments after deduction of proposed
EMI.
 NTH: The following relaxation is withdrawan: “excluding the deduction towards SPF & VPF
contribution and LIC premium) at the time of sanction where DPN, DUAL and Canbudget loan
scheme for purchase of books are availed/outstanding the installments amount of these loans
are to be added back for determining the gross emoluments and immediately on availing DPN
loans these loans are to be cleared with full upto date interest”. ROI: 9% p.a. compounded
monthly

Car Loan For Officers/Workman: (Ref. Cir no.;268/2009,73&279/2013, 571/2014,

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 47 | P a g e
 503/2015)

Car Loan Scheme at concessional ROI to all confirmed officers:

1.Purchase of 4 wheeler brand new or upto 5 year old petrol/diesel passenger
car/jeep/van/SUV/MUV/LUV , 2.NTH should be minimum Rs 10000/- or 35 % of gross salary
3. Quantum: 90 % of cost & maximum of Rs 10 Lacs for Brand new car. 80 % of value &
maximum of Rs 6 Lacs for used car. 4.ROI :8.5 % simple , 5.Repayment : 180 monthly
instalments ( 120 months towards principal liability @ Rs 834 per lacs and 60 months towards
interest liability@ Rs 714 per lacs)

Modification in LHV ( 2 wheeler )

1.Purchase of brand new vehicle ( except bicycles and mopeds) or used vehicles ( not more
than 5 years), 2.Eligibility: All confirmed officers and workmen employees
3. Quantum: 90% of cost & maximum of Rs 1 Lacs for brand new vehicle .80 5 of value &
maximum of Rs 50000 for used vehicle. 4.ROI : upto Rs 400007.5 % simple ,Above Rs
40000 & upto Rs 1 Lacs 8.5% simple, 5.Repayment : 84 monthly instalments ( 66 months
towards principal liability and 18 months towards interest liability); 6.NTH : 25%

Car Loan scheme for workmen employees at concessional ROI :( Product code 690 )
1.Purchase of 4 wheeler brand new or upto 5 year old petrol/diesel passenger
car/jeep/van/SUV/MUV/LUV, 2.NTH should be minimum Rs 10000/- or 35 % of gross salary
3.Eligibility : Basic X Rs 15360 , Minimum 5 year service , Minimum NTH 35 % of gross salary (
min NTH Rs 10000/- ), 4. Quantum: 90 % of cost & maximum of Rs 5Lacs for Brand new car.
80 % of value & maximum of Rs 3.5 Lacs for used car, 5.ROI : 9.5 % simple , 6.Repayment :
180 monthly instalments ( 120 months towards principal liability @ Rs 834 per lacs and 60
months towards interest liability@ Rs 798 per lacs), 7.Sanctioning authority : DM -Circle

SPECIAL VEHICLE LOAN ( Ref. Cir no. ; 434/2013, 72/2014)

 For purchase of brand new two-wheeler by employees of the bank during the probationary
period
 Quantum of the loan 260,000/- or 90% of the cost of the vehicle whichever is less
 Rate of interest at on-going base rate
 Repayment period fixed at 84 EMIs.
 Probationary Officers on confirmation in the services of Bank, may opt for conversion of loan
under this scheme to staff LHV scheme. Similarly, probationary clerks on reaching

 Basic Pay of Rs.8400/- may opt for conversion of the loan to staff LHV scheme. On conversion
of the loan, the instalment can be recasted so as to adjust the loan to be repaid in remaining
intalments in the ratio 5:2.

 Stipulation To Note Lien On Caution Deposit Obtained From Probationary Officers (Pos) As
Additional Security To The Loan For Purchase Of Brand New Two-Wheeler Is Waived.

EMPLOYEES' HOUSING LOAN SCHEME(Cir.217/2006, 331/2010,

403/2012, 270/2013, 561/2014, 230/2015)
 ELIGIBILITY: ALL CONFIRMED OFFICER EMPLOYEES AND (B) ALL CONFIRMED WORKMEN
EMPLOYEES WHO HAVE COMPLETED 2 YEARS OF CONTINUOUS SERVICE ARE ELIGIBLE TO
AVAIL THE LOAN.
 AVAILMENT OF THE ELIGIBLE BALANCE AMOUNT UNDER EHL AS ADDITIONAL HOUSING
LOAN (AHL) ALLOWED.
Quantum- Maximum Quantum of loan is as under. EHL can be considered jointly/individually if
both husband & wife are employee of our bank. Employee can acquire two House/Flat within over
all entitlement. Only 1/3rd of loan can be sanctioned for acquisitation of plot.

(Rs in lacs)
Cadre EHL
Executives Sc-VI & VII 75.00
Executives Sc-IV & V 60.00
Officers I to III 50.00
Clerical Staff 30.00

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 48 | P a g e
 Sub-ordinate Staff 20.00
Margin - 10% of the project cost. Rate of Interest - 8% p.a.simple.
Repayment -To be repaid in 240 months. Principal in 168 equal monthly installments and interest in
72 equal monthly installments thereafter for all employees uniformly. For loans availed on or after
30.04.2015, total repayment period 360 months (Principal in 240 months & Interest in 120
months). HL limits/liabilities is permitted to be continued on same terms and conditions as EHL for
a period upto 15 years from the date of retirement (including voluntary retirement) or the ex-
employee attaining age of 75 years whichever is earlier. The monthly net take home salary after
taking into account the proposed EHL repayment installments shall not be less than 25% of the
monthly gross salary.
Eligible amount for purchase of plot in case of proposals for purchase of site and construction of
house thereon - 40% of the loan sanctioned for purchase of plot is stipulated if the loan is
sanctioned for purchase of a plot and construction of house thereon irrespective of the cadre viz.,
this guideline is applicable to both officer employees and workmen employees (For loans
sanctioned on or after 30.04.2015).
Loan amount for repairs/ maintenance/ renovation/ enlargement of existing dwelling unit in case the
employee has not availed loan under EHL: Loan Amount (Z in lacs) 10.00, 7.00 & 4.00 for Officers,
Clerical staff & Sub-staff respectively.
Repayment: As applicable to EHL i.e. 30 years. Other terms and conditions as applicable to EHL.
The restriction stipulated on the availability of minimum residual service is removed and all the
employees, irrespective of the residual service, may be permitted to avail EHL for house/ flat
which is under construction. In such cases, repayment holiday period of maximum 12 months
may be considered.
Further, at least one disbursement should have been taken place before retirement (including
voluntary retirement) from the services of the Bank. Repayment of installment shall commence
from the 13 th month or in case left over service is less than 12 months, repayment shall
commence immediately after retirement irrespective of the completion of the project. However,
the maximum repayment period after retirement shall be 10 years.
Repayment for the EHL shall be reckoned considering the permanent source of income i.e. Pension.
The income earned from the investments may also be considered for arriving at total income/NTH.
Besides, the retiring employee shall give an undertaking to maintain the minimum required NTH
during the pendency of the loan liability.
The condition of maintenance of margin of 40% on the original project cost while permitting
continuation of EHL of the employees from the date of retirement including VRS has been waived.
(Cir 59/2014)
Additional Housing Loan (AHL) CIR -373/2015
ADDITIONAL HOUSING LOAN – FIXING OF CEILING FOR REPAIRS/ RENOVATIONS.
Revised ceiling on the quantum of loan under Additional Housing Loan (AHL) for undertaking repairs/
renovations and enlargement within the total eligible quantum and modified repayment terms (Rs. In
lacs).
(a) Quantum For Repairs/ Renovations Enlargement
Officers 10 Maximum eligible amount under EHL
Clerks 7 less amount already availed under
Subordinate 4 EHL/AHL
staff
(a) Repayment 120 months. As applicable to EHL i.e. 30 years.
Principle 84 months Principle 240 months
Interest 36 months Interest-120 months
Revised ceiling on the quantum of loan under Employees Housing Loan (EHL) for undertaking repairs/
renovations and enlargement within the total eligible quantum and modified repayment terms (Rs. In
lacs).
(a) Quantum For Repairs/ Renovations Enlargement
Officers 10 Maximum eligible amount under EHL
Clerks 7 less amount already availed under
Subordinate 4 EHL/AHL
staff
(a) Repayment 120 months. As applicable to EHL i.e. 30 years.
Principle 84 months Principle 240 months
Interest 36 months Interest-120 months

 site and construction of house thereon

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 49 | P a g e
 Existing guidelines Modified guidelines **
1/3rd of the loan sanctioned 40% of the loan sanctioned for
for purchase of plot is purchase of plot is stipulated
stipulated if the loan is if the loan is sanctioned for
sanctioned for purchase of a purchase of a plot and
plot and construction of house construction of house thereon
thereon irrespective of the irrespective of the cadre
cadre viz., this guideline is viz., this guideline is
applicable to both officer applicable to both officer
employees and workmen employees and workmen
employees. employees.
 ** Applicable in case of loans sanctioned on or after 30.04.2015

 Continuation of HL liability on cessation from the services of the bank

 The clause regarding continuation of HL liability on cessation from the services of the Bank
modified as under:

Existing guidelines Modified guidelines #

HL limits/liabilities is permitted to be HL limits/liabilities is permitted to be
continued on the same terms and continued on the same terms and
conditions of the Employees’ Housing conditions of the employees housing
Loan (EHL) for a period upto 10 years Loan (EHL) for a period upto 15 years
from the date of ceasing to be in services from the date of retirement (including
of the Bank [i.e., those who retired from voluntary retirement) from the services of
the services of the Bank (including the Bank or the exemployee attaining the
voluntary retirement)]. However, the age of 75 years, whichever is earlier.
repayment tenor (including continuation However, the repayment tenor (including
of repayment after retirement) shall not continuation of repayment after
exceed the repayment tenor stipulated as retirement) shall not exceed the
per sanction terms. repayment tenor stipulated as per
sanction terms.
 # Applicable in case of permission accorded on or after 30.04.2015 for continuation of the
limits/ liabilities of Housing Loan.
Note- Sanctioning Of Loans And Advances To Employees Of The Bank Kept Out Of The Purview Of
The Credit Approval Committee (CACs). The powers delegated to the individual authorities prior to the
formation of CACs shall continue to be exercised by them in respect of staff loans under respective
schemes.
Housing Loan scheme to Retired Employees of the Bank (CIR 358/2015)
The scheme is for those employees who retired on superannuation but has not availed any Housing
Loan from any of the Bank and does not own house during their active service. Employees ceased to
be in service due to VRS, CRS, termination & resignation are not eligible.
Product code for retired workmen employees is 666 and for retired officer employees are 667.
HL for purchase /construction of house/flat .HL for purchase of site alone is not permitted .Maximum 40 %
of loan sanctioned can be permitted for purchase of site.
Age limit : Above 60 & upto 65 years .The shall be availed in the name of retired employees and
spouse and/or one or more major children .The property should be in the name of retired
employees and/or spouse or jointly with one or more major children.
Quantum : Officers → Rs 30 Lacs ,Clerical Staff →Rs 18 Lacs , Sub Staff →Rs 12 Lacs
NTH: 25 % or Rs 5000 whichever is higher .Income of joint borrower may be reckoned for the
purpose of NTH. Additional loan amount may be permitted under Housing Loan scheme for senior
citizens. ROI: 8.5 % simple. Upon demise of the retired employee, the loan shall attract ROI as
applicable under Housing Loan Scheme for Senior Citizens.
Repayment Period : Maximum 15 Years ,till borrower attain the age of 75 years ,1-18 months
repayment holiday ( Principal installment : 124 months , Interest installment :56 months )
Processing Charges : Nil, Sanctioning Authority : DGM of circle

Workmen Employee : Implementation of 10th bipartite settlement dated 25.05.2015 ( Cir

323/2015 )
For clerical and sub staff eight stagnation increment @ Rs 1310 & Rs 655 at frequencies of 3 and 2 years
respectively .
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 50 | P a g e
HRA : 10 % ,9 % and 7.5 % in group A ,group B and other places respectively
Transport allowance : Rs 425 per month upto 15th stage of scale of pay , thereafter Rs 470 per month
Hill & Fuel allowance : 8 % ( Max Rs 1500 p.m ) ,4 % ( Max Rs 600 p.m.) & 3 % ( Max Rs 500 p.m.) at
place above 3000 meter , between 1500-3000 meter and between 1000-1500 meter height respectively
Medical aid : Rs 2200 ( for year 2012 pro rata for 2 months only )
Compensation on transfer :
Transporting personal effects ( by train )
Non Sub Staff : 3000 kg for married persons and 2000 kg for unmarried persons
Sub Staff : 2000 kg for married persons and 1150 for unmarried person
Compensation on losses due to damage of goods on transfer is Rs 1500/1000, if receipt is produced and
Rs
1000 /750 ,if receipt is not produced for clerical staff / sub staff
Halting Allowance : Rs 700 /600/450 for clerical staff and Rs 500 /400/250 for sub staff at Group
A/group
B / other places
Washing allowance : Rs 150 p.m. where washing of livery is not arranged by bank
Cycle allowance to sub staff: Rs 100 p.m., Split duty allowance: Rs 150 p.m.
Expenses on road travel: actual expenses or Rs 6 /- per k.m.
PL: Max 4 times in a year, apply 15 days in advance, Max 270 PL can be accumulated but encashment is
restricted to 240 leaves.
Paternity Leave: Male employees with less than two surviving children shall be eligible for 15 days
Paternity Leave during his wife’s confinement. This leave may be combined with any other kind of leave
except casual leave. The leave may be availed upto 15 days before or upto 6 months from the date of
delivery of the child. Sick Leave: CL converted into Sick Leave may also be availed without production
of medical certificate for 4 days at a time once in a year or two days at a time, twice a year. Joining
Time: Six days within 3 months of joining new place.

RELIEF UNDER SECTION 89(1) - TREATMENT ON ARREARS OF SALARY PAID AS PER 10TH
BIPARTITE SETTLEMENT IN CASE OF EMPLOYEES IN SERVICE : Ref. Cir. : 334/2015
The 10th Bipartite Agreement was signed and accordingly arrears of Salary is being paid to all the
employees during the FY 2015-16. As per Section 17 of Income Tax Act 1961, �“alary� includes
wages, fees, commissions, incentives, perquisites, profits in lieu of or in addition to salary, arrears,
advance of salary, encashment of leave/LFC, annuity or pension, gratuity payments etc. Since the
arrears pertain to earlier FYs, employees can claim relief under section 89(1) on Income Tax Act,
1961. The process for claiming such relief is given below: The 10th Bipartite Agreement was signed
and accordingly arrears of Salary is being paid to all the employees during the FY 2015-16. As per
Section 17 of Income Tax Act 1961, salary includes wages, fees, commissions, incentives, perquisites,
profits in lieu of or in addition to salary, arrears, advance of salary, encashment of leave/LFC, annuity
or pension, gratuity payments etc. Since the arrears pertain to earlier FYs, employees can claim relief
under section 89(1) on Income Tax Act, 1961. The process for claiming such relief is given below:
1. COMPUTATION OF RELIEF UNDER SECTION 89(1) – ARREARS OF SALARY
2. TREATMENT OF ARREARS OF HOUSE RENT ALLOWANCE:
3. COMPUTATION OF RELIEF IN RESPECT OF LEAVE ENCASHMENT U/S 89(1)

LEAVE FARE CONCESSION TO WORKMEN EMPLOYEES ( Cir 338/2015) :

For LFC encashment, an employee will be entitled to receive Notional Train Fare equivalent amount
for the admissible distance (depending on a 2 year or 4 year block) by the entitled class, net of
TDS .(under 9th BPS the entitlement was 75% of the Notional Train fare ,now it is 100% of the
Notional Train fare). LFC can be availed without any leave availment & while encashing LFC, PL also
can be encashed. All workmen can opt within 90 days from the date of 10th Bi-partite Settlement
i.e., 25.05.2015, to avail LFC under two years / four years block as the case may be. If no option is
exercised within the stipulated period, the earlier option will continue to be operative.
Permissible one way distance for 2 year block : 2500 KM for Sub staff , 2000 Km for Non Sub
Staff Permissible one way distance for 4 year block :5000 KM for Sub staff , 4000 Km for Non
Sub Staff LFC for travel to place of domicile is not encashable.
Wholly dependent family members : Monthly income should not exceeds Rs 10000 ( clubbed
together ) Eligibility for sub staff : III AC by train , II class cabin by steamer
Eligibility for Non Sub Staff : II AC by train , I class cabin by steamer
‘Family’ include spouse, wholly dependent unmarried children, wholly dependent physically/mentally
challenged brother/sister with 40 % or more disability, unmarried /divorced /abandoned/separated
sister, widowed/ dependent divorced/separated daughter and wholly dependent parents.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 51 | P a g e
Salary revision for officers employee 10th bipartite settlement ( Cir 342/2015 )

Basic of scale I/II/III/IV/V/VI/VII is Rs 23700/31705/42020/50030/59170/68680/76520

Stagnation Increment :
Scale I: Every three years of completed service. First two of Rs 1310 ,next two of Rs 1460 each
Scale II: Rs 1460. First three increments on every three years of completed service, fourth increment on
two
years of service from third such increment.
Scale III : Rs 1460. First four increments on every 3 years of completed service .Fifth increment in two
years from fourth increment.
Scale IV : One stagnation increment of Rs 1650 ,three years after reaching the maximum .
HRA : 9/8/7 % in Group A /Group B and Goa /Other Places
CCA : 4 % of Basic ( Max Rs 870 ) in area I and Goa .3 % of Basic ( Max 600 ) in population of five
lakhs
and above ,state capital ,Chandigarh ,Puducherry and port blair .
Special Allowance: Scale I-III :7.75 % of basic +DA , Scale IV-V :10 % of basic + DA ,Scale VI-VII:11
%
Medical Aid : JMG and MMG X Rs 8000 , SMG and TEG X Rs 9050
Recovery of House/furniture rent: 0.75 % /0.15 % of the first stage of scale of pay.
Deputation Allowance :
Outside Bank 7.75 % of basic ( Max Rs 4000 ) , Within Organisation : 4 % of basic ( Max Rs 2000 )
Hill & Fuel Allowance :
1000-1500 meter altitude :2 % of Pay ( Max 750 ) ,1500-3000 meter altitude : 2.5 % of Pay ( Max
1000 ),
3000 and above altitude : 5 % of Pay ( Max 2000)
Halting Allowance : Halting in Metro / Major ‘A’ Class cities / Area I /Other Places
Scale I-III :1300/1100/950/800 , Scale IV-V :1500/1300/1100/950 , VI & above :
1800/1300/1100/950
LFC Encashment: Scale I-III X4500 km one way, Scale IV & above X5500 km one way.
Mid-academic year transfer allowance: Rs 1100/- p.m.
Compensation on transfer: Scale I-III X Rs 15000 , Scale IV & above X Rs 20000
Paternity Leave :Male officer employee with less than 2 surviving children are eligible for 15 days
paternity leave .It can be combined with any leave except CL .The leave shall be applied 15 days before
or
upto 6 months from date of delivery .
Maternity Leave: Maximum 6 months on one occasion and 12 months in entire service. Privilege Leave:
Can be accumulated upto 270 days, but encashment is restricted upto 240 days . Special Sick Leave: Max
30 days and only once during service for donation of kidney/organ.

Enhancement in Rental ceiling ( Cir 340/2015 )

Rental ceiling for scale I/II/III
1.Delhi ( Including Noida, Ghaziabad and Gurgaon ) and Mumbai : 20000/21000/22000
2.Bangalore ,Kolkata ,Chennai ,Hyderabad, secunderabad ,Ahmedabad, Chandigarh ,Faridabad & Pune
:17000/17500/18000
3.State capital ,Area –I , Places above 10 Lacs & above population , port blair :13000/13500/14000
4.Other Places in Goa ( except Panji ) :11000/11500/12000
5.Area –II :10000/10500/11000
6.Area-III :6500/7000/7500
Officers posted to the NE Region and falling under the Government guidelines for two way quarters facility
will continue to be considered at 60% of the prevailing rates of rental reimbursement.
PO &confirmed Officers may stay in Lodge / Hostel / PG Accommodation if Bank owned quarters / Bank
leased quarters are not available at the Centre. Reimbursement shall be fixed at 60 % of rental ceiling.

Local Conveyance Expenses to Workmen Employees (Box item 7/2010)

> Metropolitan Cities, Mumbai, Bangalore, Hyderabad, Ahmadabad, Kolkata, Delhi and
Chennai: `45/- per day(Maximum > Other Centres : `35/- per day ( Maximum)
Special Allowance (w.e.f. 01.11.2012)
With effect from 01.11.2012, officers shall be paid Special Allowance as under:
Scale I-III –7.75% of Basic Pay + applicable Dearness Allowance thereon.
Scale IV -V –10% of Basic Pay + applicable Dearness Allowance thereon.
Scale VI -VII –11%of Basic Pay +applicable Dearness Allowance thereon.
Note: The Special allowance with applicable DA thereon shall not reckoned for superannuation
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 52 | P a g e
 benefits, viz, pension including NPS, PF and Gratuity.
Halting Allowance (Cir 190/2010)
Clerical (in brackets :Substaff) : Population >15lacs+Goa: `500/- (`375/-)
Population >5lacs + State Capitals : `375/- (`250/-)
Other Places: `300 (185)
HA for Officers (Cir 342/2015) wef 01.06.2015
METRO Major ‘A' Other
Grade / Scales Area I
(RS) class Places (`)
of Officers (`)
cities (`)
Officers in 1800/- 1300/- 1100/- 950/-
Scale VI & above
Officers in 1500/- 1300 1100 950
Scale IV & V
Officers in 1300/- 1100/- 950/- 800/-
Scale I/II/III

HA For workman / sub staff :

population CLERKS SUBSTAFF
>12 LACS 700 500

>5 LACS 600 400

OTHER PLACES 450 250

HALTING ALLOWANCE ON TRANSFER: (if quarters /own house not available at transferee place)
Scale I Officers, Second Line Managers/SMs: 4 days.
SM/Mgr in Administration, STC/RSTC, For newly proposed branches, Scale I,II, III incharge of Small
branches: 7 days
Scale II, III incharge of Medium branches, Large branches, Clg Sec, FD, CC, A/c sec, Scale III of
ELB/VLB & Scale IV and above : 10 days
OTHER EXPENSES ON TRANSFER:
For Packing, Local Transportation,Insurance, loading and unloading of personal belongings, by
giving a declaration for having incurred the expenses: Scale I, II, III : `9000/- wef 01-05-2010.
Scale IV, V,VI, VII: Rs.`12,000/-reimbursement of packing charges of Rs. 2000/- (Rupees Two
Thousand only) to direct recruit probationary officers on transfer during their probation period for
the expenses related with packing, local transportation etc., with effective from 01.10.2014
Fixing cut-off limit to Scale I Officers of our Bank for authorizing cash cheque payments
(Cir 188/2009)
Authorizing payment of cash cheques :
 Up to `2.00 lacs (staff accounts `10,000/- only ) :Scale I Officers
 Beyond `2.00 lacs : Scale II and above
 Where the Branch-in-Charge is Scale I Officer: full powers
Cashless Facility for Hospitalisation to our Employees (Cir 87/2011)
 Bank has entered into tieup with reputed hospitals by way of MOU. Cashless facility for
Hospitalisation will be extended by the Bank through the empanelled hospitals and it is a
benevolent Scheme for all the employees.
MEMENTOS TO RETIRING EMPLOYEES ON SUPERANNUTION(Cir 350/2011) Bank has
introduced a Scheme for presenting Mementos to retiring employees on Superannuation in
recognition of their services to the Bank. The details are furnished here below: 1.All employees
who retire on superannuation on or after 31/10/2011 shall only be eligible under the Scheme.
2. Any other mode of exit from the Bank other than retirement on attaining age of
superannuation is not covered under the Scheme.
3. The HRM / HOSA / SAS as the case may be, after ensuring that an employee is eligible
for memento under the scheme and that there is no pending/ contemplated Disciplinary
Action against him/her, permit the employee by addressing a letter, to purchase a gift
article of his/her choice clearly
indicating that Bank will be reimbursing upto `10000/- against bill, on the day of his retirement. A
copy of this letter shall be marked to Branch/ Office where the retiring employee is working. The

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 53 | P a g e
 Branch shall ensure that the letter so received from the HRM is served on the retiring employee
against the acknowledgement.

IBA Medical Insurance Scheme for Retired Officers/Employees ( cir 443/2015) :

1. Scheme is for retirees and dependent spouse only. One Time option is extended to retirees.
Those who do not opt now, will not be able to join later. Those who opted to join and subsequently
opt out ,will not be able to rejoin. 2. Officers : SA Rs 4 lacs ,Premium is Rs 6573 + ST, 3.
Workmen: SA Rs 3 Lacs , Premium is Rs 4930 + ST

Group Personal Accident Insurance Policy for Employees ( Cir no. 508/2015 ) : Renewed for
one year from 01.09.15 to 31.08.16, Insurance cover ( In Lacs) for Sub staff ,PTE/Clerk,
SPL/I/II,III/IV,V/VI,VII
1.Death in Rest of India : Rs 1.25 /1.5/3.00/4/6/7.00 Lacs
2.Death In J &K : Rs 1.50/ 3.00/ 5.00/5.00/ 9.50/9.50 Lacs
3.Disability in Rest of India : NA / NA/ Rs 0.50/ Rs 1.00 / Rs 2.00/Rs 2.00 Lacs
4.Disability in J & K : NA / NA/ Rs 1.00/ Rs 1.00 / Rs 2.00/Rs 2.00 Lacs
The insurance cover available to Executive/Visiting Executive in respect of j &K is in addition to
insurance cover available for death (not disability) for rest of India.
Insurance cover available to workmen/officer employees for death is for 24 hours. Death due to
natural
causes and suicide is not covered.
All officer staff are covered following additional risks for the injury caused on account of death
1. Temporary total disablement: 1% of capital sum insured (Max Rs 5000/- per week). Maximum
period of compensation payable is 100 weeks and in no case compensation shall exceed sum insured
2.Permanent /partial disability : Loss of toes-20 %,Loss of hearing both ears- 75%,,one ear -30 %,
Loss of four fingers and thumb-40 % ,Loss of four fingers-35 % ,Loss of thumb both phalanges-25
%,one phalange- 10 %
Weekly benefits can be claimed if the leave exceeds three days .Weekly compensation is settled have
to be retained by the bank, is officer is sanctioned special leave. If officer avails leave at his/her
credit,
compensation will be passed on him/her. Special leave is directly related to weekly compensation
sanctioned by the insurance company .Absence of employees beyond the weekly compensation
settled;
appropriate category of leave has to be debited.
Intimation in writing and Bank attested claim papers should be submitted to M/s New India
Assurance Company Limited fit claim. A copy of claim form is to be endorsed to HOSA section.
In case of death due to accident .the insurance company will also pay expenses for shifting the dead
body from the place of accident to the place of residence at the rate 2 % of the capital sum insured or
Rs 2500/- whichever is less.

IBA Medical Insurance scheme for Retired Officers/Employees ( Cir : 513/2015)

Retired officers /employees have to check the name, if they have submitted the option, in the list
provided by the bank. Retirees should invariably provide their e-mail and mobile number, since
insurance company requires contact detail of retirees for further communication.

Medical Insurance Scheme- w.e.f. 06.10.2015 ( Cir 532/2015 ) :

Coverage: Officers/Clerical/Sub-ordinates Rs 4/3/3 Lacs. Coverage is available to employee +
spouse+ dependent children (Monthly income upto Rs 10000/-) + any two of the dependent parents
/ parents-in-law. Scheme would be continued beyond retirement/resignation subject to payment of
premium
Cashless treatment facility is available in network hospitals. Domiciliary treatment is also covered for
the specified diseases. Pre-existing diseases would be covered for reimbursement.
Medical expenses incurred 30 days before hospitalization and 90 days after discharge are covered.
Employees ( not for dependents or retired employee) shall be provided additional ex-gratia of Rs 1
Lac, if they contract certain critical illness
Treatment taken for accidents can be payable even on OPD basis in Hospital
Maternity expenses: Max Rs 50000/- for normal and Rs 75000/- for caesarean. All expenses on the
new
born baby during maternity will be covered in addition to the maternity limit and upto Rs 20000/-
Ambulance Charges : Rs 2500/- per trip, Auto Charges : Rs 750/- per trip
Room and Boarding Expenses :Max Rs 5000/- per day , ICU expenses : Max Rs 7500/- per day

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 54 | P a g e
 In case of admission to non network hospitals, the intimation of hospitalization shall be submitted to
TPA/ HRM within7 days of hospitalization. Bills should be submitted to HRM within 30 days from date
of
discharge. M/s Medi Assist India TPA Pvt. Ltd is our Bank TPA
For hospitalization and claiming cashless employee require E-cards which can be downloaded by
accessing the link Cannets HRD sMediclaim Login . Employee can access through medibuddy app on
android phones or can access to www.medibuddy.in in mobile browser.
Login ID and password are : staffnumber@ibacan ,DOB in dd-mm-yyyy format Toll Free Number :
1800-425—5222

IBA Medical Insurance Scheme for Retirees( Cir 538/2015) ; Web portal of TPA is
https://tpa.mediassistindia.net/iwp , which can be used for search of network hospital and also for
claim submission. Login ID and password are : staffnumber@iba ,DOB in dd-mm-yyyy format
Intimation of hospitalization to be submitted to TPA within 7 days of hospitalization and claim (online
/offline) should be submitted to TPA within 30 days from date of discharge. Toll free Number1800 425
52222
IBA Medical Insurance Scheme for Retirees ( cir 545/2015) : Following covers are not
available to retirees mediclaim policy 1.Maternity Expenses 2.Critical illness cover 3 Domicialaries
Expenses 4.Corporate buffer 5.Dependents are not covered ( only employees + spouse)

IBA medical Insurance Scheme for the spouse of deceased employees who exited Bank
on account of death/VRS/SVRS/Superannuation ( Cir 539/2015)
Scheme can be extended (One Time Option) to “Spouse of Retirees” (not the dependent) subject to
payment of premium being borne by them. Option is available till 27.11.2015
Master policy has commenced from 01.11.2015 and is available till 31.10.2016
Optee has to authorize bank to debit his/her account (pension account only, if drawing pension from
Canara Bank). Bank will continue to act unless instruction otherwise is conveyed at least one month
before due date of payment of premium. Option would be treated as lapsed, in case sufficient fund is
not available. Annual premium payable is subject to change from time to time.
1.Spouse of deceased workmen employee : Sum Insured →Rs 3 Lacs, Premium →Rs 5621 (
4930+691) 2.Spouse of deceased officer employee: Sum Insured →Rs 4 Lacs, Premium→ Rs 7494
(6573+921)

Defined Contributory Pension Scheme(Cir 128/2013)

New Pension Scheme(NPS) in the banking sector in respect
of employees who joined the bank on or after 01/04/2010
 Employees joining the services of the Banks on or after 1st April 2010 have been covered
under Defined Contributory Pension Scheme.
 The Defined Contributory Pension Scheme introduced in Banking Sector will be one as
governed by the Provisions
of New Pension Scheme for the employees of Central Government w.e.f 01/01/2004 as
modified from time to time.
 NPS has unbundled Architecture, where each function is performed by different entity like:
 Central Record Keeping functions are performed by the NSDL. Record keeping,
administration, Issue of Unique Permanent Retirement Account Number to each subscribers
of the NPS, maintaining a database of all PRANs issued, Statement of subscriber and
Customer service functions for all subscribers.
 Funds are managed by Fund Managers from Public Sector with proven track
record and are required to invest
strictly in accordance with the guidelines issued by the Government of India and PFRDA. As
per the recent notifications issued by PFRDA, our BANK had chosen SBI PENSION FUNDS
LTD as PENSION FUND MANAGER to manage the funds of the employees.
 BANK OF INDIA provides TRUSTEE BANK functions. The Trustee Bank would manage the
banking of Pension Funds in accordance with the applicable provisions of the NPS scheme
guidelines / notifications issued by PFRDA, Ministry of Finance and Government of India
from time to time.
 Under NPS following two types of accounts are available:
 TIER I – Employer/Employee can contribute for retirement into this non withdrawal account.
Income tax benefits as per the IT Act, 1961 are available for both employer and employee
contributions.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 55 | P a g e
TIER II – This is a voluntary savings facility, where the subscriber can contribute directly from their
account. There is no provision to remit TIER II CONTRIBUTION from their salary. As such, under any
circumstances, no updation shall be made in the salary for recovery of TIER II / VPF for these
employees. Subscribers will be free to
withdraw savings from this account whenever they wish.
 Amount deducted from salary being the DCPS contribution along with Matching
Contribution from the Bank is directly transferred to appropriate authority(Fund Manager)
for investment purpose.

INTRODUCTION OF NEW SCHEME FOR PROVIDING FURNITURE / FIXTURES TO THE

OFFICERS.(Cir 303/2013, 609/2013, 467/2014)

Eligibility: The scheme will be applicable to the Officers residing in Bank’s accommodation/ leased
residence / residence owned by the Officers and / or residence taken by the Officers on rent.
a) All confirmed Officers in Scale-I to Scale-VII are eligible.
b) Promotee Scale-I Officers on probation are eligible to avail the scheme.
c) Direct Recruit Probationary Officers (including Specialist Officers) who are posted to a
Branch/Office on regular posting during probation are eligible to avail the facility under the
scheme, subject to execution of the BOND for the total cost of the furniture items purchased.
Whereas, Direct Recruit Probationary Officers posted to different Branches / Offices for on the Job
training periodically are not eligible to avail the facility till their confirmation.
d) Officers on contract are not entitled to avail the facility under the scheme.

Monetary ceiling/limit fixed for purchase of furniture / fixtures in respect of various scales of
officers are as under :
Scale Monetory Ceiling including taxes ( Rs. in
Lacs)
taxes(Rs. InLacs)
1.00
JMGS I
MMGS II & III 1.75

SMGS IV 2.25

SMGS V 3.00

TEGS VI 4.25

TEGS VII 4.50

“CANARA CARE HOME”(Cir 305/2013, 609/2013)

Employees across the country are visiting Vellore and Mumbai for treatment of self/ dependants which
are known for better treatment of Cancer / Kidney / Heart related ailments.
As a HR initiative, the Competent Authority has permitted to set up CANARA CARE HOME at the
above places to provide accommodation facility to our employees/dependants of ouremployees
visiting the above places for the purpose of medical treatment of self or dependant. Those employees
who are in need of accommodation facility at the above places for medical treatment of chronic
ailment of self/ dependants can make use of the above facility.

Scheme for Reimbursement of expenses incurred towards purchase of cleaning materials to

Officer Employees
Scheme for reimbursement of the expenses incurred by the Officer Employees towards purchase of
cleaning material to upkeep the ambience of the quarters. The details are furnished below: LIMITS

SL No Designation Alowance Per month ( Maximum)

1 JMG Scale I Rs.300.00
2 MMG Scale - II & III Rs.400.00
3 SMG Scale - IV &V Rs.600.00
4 TEG Scale- VI Rs.800.00
5 TEG Scale- VII Rs.1000.00

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 56 | P a g e
 CONDITIONS:
1. The reimbursement is permitted to Officers staying in the quarters allotted by the Bank i.e.
Bank owned quarters and Bank leased quarters. & also officers staying in the quarters on personal
lease basis at the same rate and terms and conditions (CIR 560/2014)
2. Reimbursement shall be made towards the cost of cleaning materials only.
3. The reimbursement is on non-cumulative basis and against the invoice/bills.
4. The reimbursement shall be claimed before 10 th of the succeeding month.
5. The Officer will be responsible for proper upkeep of the quarters allotted by the Bank i.e. Bank
owned quarters and Bank leased quarters.
THE SANCTIONING AUTHORITY:
Senior Manager/Manager in charge of the branch/office and
in respect of VLBs/ELBs, the Senior Manager
A Upto Scale –III
/Manager (Administration)

B Branch Heads Self –Sanctioning

Executives in Administrative
C Units Concerned HRM Sections/HOSA Section

TEST YOURSELF: GENERAL BANKING

1) IBA means
a) Indian Bankers Academy , b) Indian Business Association c) Indian Banks
Association d) International Basketball Association e) None of the above
2) Who are the Joint Venture partners of the Insurance venture
a) HDFC Bank and ICICI Bank b) HSBC and Oriental Bank of Commerce c) IOB and ABN
AMRO Bank d) Vijaya Bank and Corporation Bank e) Syndicate Bank and Bank of India
3) K Y C means
a) Know Your Customer b) Know Your Counter c) Know Your Clerks d) Keep Your
counter Clean e) Keep Your Customer Happy
4) Who is the present Governor of Reserve Bank of India
a) Sri. S.Raman b) Sri. Manmohan Singh c) Sri. Raghuram Rajan d) Sri. D.Subba
Rao e) Sri .R K Dubey
5) CRR means
a) Credit Risk register, b) Corporate Regulation Register c. Cash Reserve Ratio d.Compulsory
Retirement Rules e.None of the above
6) What is PAN in Income Tax matters a.Party Account Number ,b. Partnership Account Name c.
Pension account Number, d. Permanent Account Number e. None of the above
7) Bancassurance is
a. Bank assures the depositors about the safety of their money put in the bank b. Bank gives
assurance to RBI to earn profit c. Bank assures credit to eligible parties
d. Bank sells Insurance products of Insurance companies e. None of the above
8) CRM means
a.Customer Relationship Management b.Company Relationship Management c.Consumer Redressal
Management d.Cash Register Maintenance e.Clerical Responsibility Matters
9. CD ratio means : a. Company Debenture Ratio b. Credit Deposit Ratio c. Credit Debit Ratio, d.
Corporate Debt Ratio e. Cancard Default Ratio
10) RTI Act means
a) Right to Inspection Act , b) Reservation to Indian Citizens Act c) Right Hand Thumb Impression,
d.Right to Information Act, e. No such Act
11) Customer Fortnight is observed every year in the month of a) November b) Every month c) July
d) March e) No such function
12) A rural branch is one opened in a place having population of a) upto 9999 b) Upto 100000 c)
Upto 20000 d) In any village e) None of the above
13) To open a new branch in Urban Area, permission is to be obtained from: a) RBI b) Ministry of
Finance c) Board of Directors d) Head Office of our Bank e) No permission is required
14) As per KYC norms, records should be preserved for a maximum period Years : a) 3 b) 4c)5
d)6 e)10
15) After conducting Risk Based Internal Audit (RBIA) of branches, branches will be awarded
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 57 | P a g e
gradation. How many inspection gradations/risk categorizations are there under RBIA: a) 3b) 4
c)5 d) 6 e) 2
16) Special Assistant can sign Pay Orders with amount upto Rs.
a) Rs.25,000/- b) Rs.50,000/- c) Rs.1,00,000/- d) Rs.1,50,000/- e) Rs.2,00,000/-
17) Quoting of PAN of the customer is mandatory for any of the following transactions related to
banking: (Cir 183/2011) :
a. Opening a time deposit, exceeding fifty thousand rupees, b. Opening an account, (not being a
time-deposit)
c. Payment in cash for purchase of bank drafts or pay orders or banker's cheques for an
amount aggregating Rs.50,000 or more during any one day d. Deposit in cash aggregating Rs.
50,000 or more during any one day, e. All the above.

ANSWER : GENERAL ANSWERS

1 2 3 4 5 6 7 8 9 10

c b a c c D d a b d

11 12 13 14 15 16 17

A A a E a B E

CASH
1) After office hours cash received and cash paid rubber stamps are to be kept in
a. in the cash cabin itself ,b. in the single lock box and the box is kept in double lock c. in Double Lock
in Manager’s cabin with the Officer in charge of cash
2) Banks should issue only notes to public : a. Soiled notes, b. cut notes, c. clean notes d.
mutilated notes, e. all the above
3) Banks should not a. staple the currency notes , b. write anything on the currency notes c.
Issue soiled notes to public d. refuse to accept small denomination notes , e. all the above
4) Keys of single lock box will be with a. Supervisor of SB department b. Cashier c. Cash officer
d. Manager e. Tappal clerk
5) Ultra violet lamp is : a. A lamp used when electricity goes off in the branch b. Used to verify
forged notes & cash cheques / cash DDs of Rs.1000 and above c. a light to see the sky during solar
and lunar eclipse d. a light to test the quality of gold ornaments pledged to the bank e. none of the
above
6) Cash payments can be made after business hours subject to a. When emergency and the
amount is Rs.10000 or less , b.only self cheques / withdrawal order forms to the drawer only c.
permitted by the Senior Manger/ Manager d. only when there is balance in the account e. all the
above conditions
7) Cash received from a customer after office hour is
a. to be kept in double lock along with credit challan b. should be handed over to the manager
c.cashier to keep it till next working day d. to be kept in single lock e. should not be accepted
at all
8) Paid instruments (cash cheques/cash DDs/other vouchers) are to be a. stitched and kept in
storewel having dual locking arrangement b. should be kept along with other debit and credit
vouchers c. should be kept in a separate cup-board in manager’s cabin d. should be sent to old
records room e. none of the above
9) In case of cash shortage
a. the concerned employee to reimburse and give explanation in the matter b. if not able to pay
immediately, debit the amount to Sundry Assets and report the matter to Staff Section of Circle office
c. if the amount is above Rs.25000, the employee is not entrusted cash duty for a year or till the
shortage is paid by him
d. if found out by Inspection officers, to be reported to Circle office as fraud e. all the above
10) Standard cash limit is
a) Cash holding limit fixed by CO and branch to operate within this limit b) limit fixed for each
customer to draw on a single day c) Limit upto which cash can be remitted to currency chest d)
Cash transaction limit fixed as per ISO standards, e) None of the above
11) Special Assistant can count cash up to denomination of : a) Rs.500 b) Rs.1000 c) Rs.50
d) As instructed by Manager e) Cannot be entrusted with counting work
12) At the end of the year the unclaimed excess cash in the branch is to be a) Transferred to Head
Office
b) Credited to Commission –Miscellaneous c) Transferred to Government account d) Can be
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 58 | P a g e
used for providing facilities to customers e) none of the above
13) In case of Teller Account, if there is no balance in the SB account, the teller cash paid cheques
are to be debited to
a) Sundry Assets account, b) Any other account of the customer c) Same SB account of the customer
d) BAR can be raised on Circle Office e) Cannot be debited at all
14) A Clerk can carry cash upto Rs. a) Rs.25,000/- b) Rs.50,000/- c) Rs.1,00,000/- d) Rs.5,000/-
e) Not permitted to carry by single employee
15) Cash shortage of Rs. , even if reported by Cashier, will be treated as fraud and reported to R
& R Section, Inspection Wing, HO. a) Rs.5,000/- b) Rs.10,000/- c) Rs.25,000/- d) Rs.1,00,000/- e)
Any Amount
16) Insurance cover for cash in ATM is Rs.
a) Rs.10 lakhs b) Rs.20 lakhs c) Rs.5 lakhs d) Rs.25 lakhs e) unlimited
17) Double Numbered Soiled Note means:
a) Not more than 2 pieces b) Essential features are not missing c) Both pieces should be of same
note d) Any of the above e) All above features
18) Branches have to remit Soiled/Torn/Mutilated /Defective Currency notes to:
a)Reserve Bank of India b) Any Currency Chest of our Bank c) Currency Chest linked to concerned
branch d) Any branch specified by Circle Office e) Branches to keep with them and destroy in the
presence of RBI officials
19) Unclaimed cash found in the branch premises, to be dealt as below:
a) Keep the cash in double lock in a closed packet b) Credit the cash to Commission account duly
noting denomination c) Credit the cash to SL Suspense Account duly noting denomination d) Hand
over to police authorities immediately
20. Under Core Banking Solutions payment of cash is permitted in following: (Cir 274/2011)
a) To third party cheques at base branch only. b) Upto `.50,000/ - per occasion in SB and CA/C only
to the drawer against self cheques, at all host branches. c) Payment of cash upto `.50,000/ - per
occasion is to be extended to OD accounts of Staff for the drawer only against self-cheques, at all
host branches. d. (b) and
(c) only. e. (a) ,(b) and (c) only
21. What is the cut off limit for authorizing cash payment of cheques by Scale I officer is
a. Rs.2 lakhs , b.Rs.5 lakhs c. Rs. 10 lakhs d. No ceiling e. Rs.50 lakhs
22 Cash remittances through NEFT for customers not having account with remitting branch is upto a
limit of
a. Rs.10000 b.Rs.20000 c.Rs. 50000 d. Rs.100000 e.Cash remittance through is not
permitted for non customers
23 Detection of counterfeit notes upto pieces in a single transaction does not require filing of FIR
a. two b. three c. four d. five e. none of the above

CASH ANSWERS
1 2 3 4 5 6 7 8 9 10
b c e b b e a a e a
11 12 13 14 15 16 17 18 19 20
a b e a b b e c c e
21 22 23
a c c

DEMAND DRAFTS
1) Validity period of Demand Draft is (336/2011)
a) 3 months b) 6 months c) 1 year d) 2 year e) 3 years
2) DD for Rs.1 lakh and above is to be signed by
a) Jointly by 2 officers who are authorized signatories b) At least one Power of attorney holder
and another officer c) By branch manager d) One supervisor and one officer e) By officer in
charge of DD department
3) Demand drafts /pay orders of Rs. & above are to be issued with account payee crossing
only:
a) Rs. 10000 b) Rs.15000 c) Rs.30000 d) Rs.20000 e) Rs.50000
4) Revalidation of DD can be done
a) 3 times b) 2 times c) Only once d) Any number of times e) Not possible
5) Issuance / payment of DD for amount is to be routed through account only.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 59 | P a g e
a) Rs.50000 and above b) Rs. 1 lakh and above c) Rs.20000 and above d) Rs.25000 and
above e) No limit
6) What is the monthly minimum balance for availing the facility of issue of Free DDs by our SB
account holders
a)Rs.25000 b)Rs.50000 c)Rs.100000 d)Rs. 10000 e)No such facility
7) Tellers can issue DDs up to a) Rs.25000 c) Rs.15000 d) Rs.100000 e) Teller cannot issue DDs
8) Issuing DD free of charges is permitted to a) All SB account holders b) All SB and Current
account holders c) SB account holders with minimum balance of Rs. 10000 d) Only for staff e) None
of the above

DEMAND DRAFTS ANSWERS

1 2 3 4 5 6 7 8
a a d c a d c c
ISC/OSC/ICC/OCC
1. ISC means –
Integrated Special Concept (b) Inward Sight for collection (c) Interest and Service Charges
(d) Internal Security Council (e)None of the above
2. ISCs/ IBCs are to be balanced as on –
15th of every month (b) Last day of the month (c) Quarterly-Last Friday (d) Monthly – Last Friday (e)
None of the above
3. Retirement of ISC Bills for Rs.50000/- and above will be permitted –
Against Pay Order (b) By debit to account only (c) Against cheque, upto realization (d) Against
Demand Drafts (e) Any of the above
4. ‘C’ form is –
Form required for sales tax purposes in respect of inter state sales (b) Is a form to be given to the
Collecting Bank (c) Cash receipt to be given to the party retiring the ISC (d) Form to be produced to
customer department (e)None of the above
5. Days of Grace in IBCs (Inward Bills for are collection)
(a) 3 days (b) 2 days (c) 6 days (d) 1 week (e) No grace days
6. Instruments are to be sent by Registered Post if the value is –
Rs.1000/- & above (b) Rs.2500-/ (c) Rs.5000/- (c) Rs.2500/- & above and in select cases
irrespective of amounts
Any amount
7. Outstation cheques upto are to be immediately to be credited
to account as per RBI guidelines
(a) Rs.20000/- (b) Rs.25000/- (c) Rs.10000/- (d) Rs.15000/- (e) Rs.50000/-
ISC/OSC/ICC/OCC ANSWERS
1 2 3 4 5 6 7
b a e a a d d

BAA / SA / SL / INTEREST COLLECTED / COMMISSION

1) Sundry Assets head consists of –

(a) Festival Advance of Staff (b) Stamps (c) Furniture and Fittings (d) Pension
payments (e)All the above
2) SA/BAA accounts are balanced as on –
(a) Last day of the month (b) 2nd Friday of every month (c) Last Friday of the month (d)
Last Friday of every Quarter (e) None of the above
3) Cash BARs pending for more than 7 days are reported in –
(a) PRR 5 (b) PRR 5A (c) PRR 6 (d) PRR 12 (e) PRR
4) All debit slips / vouchers of Sundry Liabilities to be authorized by –
(a) Manager / Senior Manager-in-charge / Branch-in-charge (b) Officer of concerned
Department (c) Officers jointly (d) Any Officer of the branch (e) None of the above
5) All Sundry Liabilities are to be balanced –
(a) As at Last Friday of every Quarter (b) As on last day of the month (c) As on last Friday
of every month (d) As on 15th o f every month (e) As on 31st March of every year
6) Interest to be charged to loans and advances is to be rounded off to nearest
a) Rupee b) 10 rupees c) 100 rupees d) Actual to be collected e) 50 paise
7) Erosion of income of Rs or more in calculation of interest, caution letter is issued on Ist
instance
a) 50000 b) 5000 c.) 25000 d.) 1 lakh e) 75000
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 60 | P a g e
8) Monthly return of interest calculation/application/checking is submitted in
a) PRR 5 b) PRR 18 c) PRR 18A d) PRR 6 e) No need to Report
9) Penal charges collected for delayed RD installments is to be credited to
a) Commission - Service charges b) Commission – Miscellaneous c) Interest on delayed RD d)
To be deducted from interest payable e) General charges – delayed installments
10) Debit to commission account is to be authorized by
a) person who originally posted the credit b) Officer incharge of establishment c) Manager and above
d) No permission necessary e) Once credited cannot be reversed

BAA ANSWERS
1 2 3 4 5 6 7 8 9 10
e a b a c a b c b c

HEAD OFFICE / CLEARING / BANKER’S ACCOUNT

1) IBAR queries are to be attended within
a) 7 daysb) 4 days c) 15 daysd) no time stipulation e) one month
2) CCMS means
a) Corporate credit monitoring systemb) Corporate Cash Management Services c) Can Card
Membership Services d) Clearing Cheque Master Scroll e) None of the above
3) Local cheque of other bank given by our SB customer of Urban branch is returned by that
bank, the charges to be collected are
a) Rs.100 b) Rs.250 c) Rs.150 d) As per manager’s instructions e) No charges
4) Clearing difference is to be accounted under
a) Sundry Assets/Sundry Liability – clearing difference b) General Charges – clearing difference
c) BAR on Head Office d) No clearing difference should be there e) None of the above
5) MICR means
a) Manual Inward Clearing Room b) Magnetic Ink Character Recognition c) Manual of
Instruction on Credit Reports d) Monthly Interest Calculations Register e) None of the above
6) Withdrawals (including cash) above Rs.50000 in Banker’s Account shall be made by
a) Manger of the branch b) Any 2 officers c) Any one power of attorney holder d) One
Manager and one officer jointly e) Jointly by 2 power of attorney holders
7) Banker’s Account Reconciliation statement is to be submitted monthly in
a) PRR 10 b) PRR 14 c) PRR 18 d) PRR 12 e) No such statement
8) Inward clearing return cheques can be viewed in option of CBS by branch.
a) ST 661 b) ST 671 c) ST 033 d) ST 034 e) None of the above
9) CTS stands for
a) Cheque Transit System b) Cheque Truncation System c) Cheque Transmit System d)
Cheque Transfer system e) None of the above
10) Which year is mentioned on CTS standard cheques
a) 2010 b) 2011 c) 2012 d) 2013

HO / CLEARING / HO ACCOUNT ANSWERS

1 2 3 4 5 6 7 8 9 10
a b c a b e b d b a
HOUSE KEEPING / INTERNAL CONTROL / SECURITY AND FIRE
SAFETY
1) Surprise verification of cash and securities at Extension counters
a) monthly b) Quarterly c) half-yearly d) Weekly e) No verification necessary
2) Half yearly Balance sheet of the bank is prepared as on
a) 1st of April and October b) 1st of January and July c) 31st of March and 30th of
September d) 28th of February and August e) Only annual balance sheet is prepared
3) Any credit to Sundry Deposits - Suspense Deposits for want of particulars should be authorized
by
a) officer in charge of respective department b) Manager/Senior Manager c) Clerk who is posting the
credit d) Officer/Manager in charge of Deposit section e) No amount to be credited to this head
& details to be traced immediately
4) When not in use, the gun provided to armed guard is to be kept
a) Gun cabinet inside the safe /strong room b) To be kept in Manager’s cabin c) Armed guard can
take it home and bring next day d) To be kept in cash cabin under lock and key
e) On a separate glass box fixed on a wall in the banking hall
5) Branches are categorized into a) High risk branchb) Medium risk branch c) Low Risk
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 61 | P a g e
Branch d) All the above e) No classification
6) Risk Based Internal Audit is applicable to
a) VLBs b) Large branches c) ELBs d) All branches e) None of the above
7) Death claim papers are to be held in Double lock for a period of from the date of settlement
a) 8 years b) 18 years c) 21 years d) Should not be destroyed or removed e) No specific period
suggested
8) Inwarding of CO/HO tappals is the duty of
a) Supervisor b) Officer in charge of the department c) Tapal Clerk d) Special Assistant e) Manager/
branch in charge
9) Nomination is available in case of
a) SB accounts b) Deposit accounts c) Safe Deposit Lockers d) Safe Custody Articles e) All the
above

HOUSE KEEPING / INTERNAL CONTROL / SECURITY AND FIRE SAFETY ANSWERS

1 2 3 4 5 6 7 8 9
a c b a d d c c e

PENSION / CREDIT / DEBIT CARDS

1) Disbursement half of Pension Payment Order is to be kept with

a) The pensioner b) The bank c) The treasury d) The department where the pensioner served
e) There is no such thing as disbursement half
2) Life Certificate is to be obtained from pensioners, every year in the month of
a) September b) January c) November d) March e) December
3) On death of the pensioner and no provision for family pension
a) Further pension to be given to legal heirs b) No future pension to be credited to the pensioner’s
account c) Future pension can be sent to Prime Minister/chief Minister Relief fund d) Future pensions
are to be kept in suspense in the branch e) None of the above
4) If Canara Card is lost or stolen and the card holder informs in writing to the bank, the liability
for unauthorized use is restricted to
a) Rs. 100 b) Rs. 1000 c) Rs. 25000 d) Rs.15000 e) Loss to be borne by the card holder
5) Cancare Scheme under Canara Card means
a) Free insurance cover for Cancard holders b) Medical scheme for Canbank men and women c)
Medical loan scheme for VIP customers d) Insurance cover for transfer of cash from one branch to
another e) None of the above
6) Hot listing of Canara Card is
a) Done when the card holder has lost the card b) When the card holder has not paid the dues and
misutilisaed the card c) Sending information on latest facilities in Canara Card d) Publishing the
list of complaints from Canara Card holders e) None of the above
7) Validity period of personalized Debit card is
a) 3 years b) 7 years c) 10 years d) 5 years e) no time limit
8) What is the main difference between Debit Card and Non Personalized Debit Card?
a) Name not available on non personalized debit card b) Validity is only 3 years for non
personalized/ 10 years for normal debit card c) Both a and b d) None of the above
9) If credit card dues amounting Rs.10,000/- and above and outstanding for more than 60 days,
name of card holder will be informed to:
a) RBI b) CIBIL c) Circle Office d) Head Office e) None of the above
10) Our Bank has formed Centralized Pension Processing Centre (CPPC) for Processing Central Govt.
and Defense Personnel Pensions. This CPPC is located in:
a) Bangalore b) Delhi c) Allahabad d) Mumbai e) Nagpur
11 ) Platinum Card is a variant of :
a) Credit Card b) Debit Card c) Both d) None
12) Pension for the month of March is to be paid on
a) 31st march b)27th March c) 1 st April d)2 nd April e)None of these.
13) Canara gift card is available in the denomination of
a)Rs.500/- b)Rs.1000/- c) Rs.2000/- d)Rs.5000/- e)All the above
14) What is “ Swavalamban”
a) Self dependency b) a retail lending scheme for purchase of durable article. c) Scheme
launched by National Pension System as apart of Govt’s Initiative towards financial inclusion. d)
Another name for Canara Saral scheme e) Govt sponsored scheme sponsored by KVIC .
15) Life certificate of pensioners to be obtained during the month of

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 62 | P a g e
a)March b)January c) November d)December e)May

PENSION/ CREDIT/DEBIT CARDS ANSWERS

1 2 3 4 5 6 7 8
b c b b a a c a
9 10 11 12 13 14 15
b a b c e c c

BALANCING & RETURNS BALANCING

Balancing Quarterly last working day -- NNND, Security items, FCNR (B),RFC &
ESCROW A/C, EEFC
Quarterly last Friday -- Cash margin on LC/Guarantees.
Monthly last Friday -- Outstanding Guarantees, CDB/SDB/LSDB/Supply Bills/BE/FDB.
Half yearly Sept / March -- Vacant Safe Deposit Lockers, Inoperative NNND a/c.
15th of every month and last day of March & Sept -- OSC / ISC
Yearly 10th March -- stock of books and forms.
Half yearly last Friday June/Dec -- Physical verification of Gold Jewellery packets.
Monthly -- Surprise Verification of Cash, GPA – Aug. Last Day,Half yearly ie 20th of Feb
and August every year and also during RBIA -- Mortgage papers PRR 18.
RETURNS
Monthly Last day : PSR 60 - SJSRY Scheme ,PSR 67 - Exposure to sensitive sectors,
PRR 43 - Return on Sundry Liabilities A/c and Sundry Deposit A/c,PRR 20A - Credit
report cum inward application register (NB 139),PRR 14 - Reconciliation Statement of
account with bankers,PRR 18A - Interest checking, PSR 54 - Customer Service committee
meeting / Customer Day, PSR 71 - Retail Lending Flash, POR 21 - NABARD Refinance
monthly disbursement register,Reporting of cash transactions and suspicious transactions
and maintenance and preservation of records, STR 30 – Inflow/outflow of Deposits under
NRE Rupee A/c , PSR 73 - NPA statement, POR 1 - Declaration and Premium Remittance
on Pre-shipment Export Credit Guarantee Policy (ECGC/WTPCG),PRR 37 : TOD Outstanding
on a/c of Debiting Can Card FTV, Basel II – Credit Risk, CTR
Monthly Last Friday : PRR 44 Non Fund Based Business, Staff Irregular Accounts, Spl.
Program to provide relief to MSME/ Unit with TUFS Details,ECGC, SRMS, PSR 1 - Flash
Report, PSR 33 – Recovery of priority sector advances, PRR 18 - Maintenance of key
register for recording day to day inward / outward entries pertaining to mortgage papers,
DSR Returns – Reporting of Unsecured Exposures (outstanding liabilities – both Fund
Based and Non-fund based credit facilities).STR 11- (RBI Statement) Daily cash and bank
balances.Deposits exempted under purview of SLR/CRR – FORTNIGHTLY ON NOTIFIED
FRIDAY,LAST FRIDAY OF MONTH & 31st MARCH :
STR 11A - Business position (Other than Notified Fridays
Last day of the Calendar Quarter : STR 33 - Return on Asset Quality,Quick Mortality (
Part A & C ) ,PSR 20 - Progress Report on SGSY scheme,STR 18 - Progressive use of
Hindi in banks,Adherence to KYC & AML guidelines – Compliance, Fair Practice code
grievances of Credit proposal; Details of CMA Parties, enjoying credit facility above
Rs.10.00 crores, Export Finance ECIB ( WTPC ), Report,Return of GR Forms,PSR 72 - SME
loan extended without collateral security, PSR 81 - Position of Applications, sanction
disbursement of Edn loans, PRR 42 - Return on Quarterly Action plan, Incident
Reporting pertaining to technology related areas, PRR 30 - Register cum Return for
Complaints received, DSBR 1 –Offsite Surveillance of Banks Reporting System - MIPD &
PP Sec, CO, PSR 77 – Kisan Credit Card Scheme – progress report, PPF return, Follow of a
leave ( April / July / Oct / Jan ).
Quarterly Last Friday: PRR 33A - LPD Accounts, PSR 22 – Applications received for
advances to Priority Sectors, PSR 7 – Priority Sector Advances to Minority communities,
PSR 26 – financial Assistance to Women beneficiaries, PSR 80 – Performance under newly
introduced Scheme of Priority Sector, DICGC Claims, PSR 43 : Export Credit Statement,
PSR 23 A – Advances to Priority Sector and SC/ST
Half yearly as on last working day of December and June : PRR 8 - Progress report stmt
on credit review and programming,PRR – 12 : Statement on Expiry date of loan Papers.

Half yearly last day Sept and March :PRR 22 – Position of Safe Deposit Lockers, STR 28
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 63 | P a g e
- Foreign Contribution Regulation Act, STR 32 – Remittance of Income / Interest allow to
NRI /OCBs on deposits/Investment held by them on Non – repatriation basis and
submitted to Regional office of RBI on half yearly basis, PRR 10 – Expenses on Vehicles,
Quick Mortality Progress Report Part B
Half yearly last Friday March and September: PRR 33C - LPD Accounts sector wise.
STR 20- Recovery performance under Govt Sponsored Schemes.
Half yearly ie on 20th Feb and 20th August and also during Risk Based Internal Audit
(RBIA),
Yearly Last Friday of June :PSR 21- Special Return of advances to priority sector,
Agriculture, Weaker Section (part A & B ), PSR – 29 – Agriculture Loan return
30th June and 31st Dec every year : PRR 35 - Liability on account of Bills discounted by
us and which are co-accepted by other Banks.
Yearly last working day of September - STR 19 – Deposit Insurance Return
31st December each year - Identification of Training need.
Yearly Last Friday of March – STR 13 – DIR Scheme, PSR – 23 : Advances to Priority
Sector
Special Watch list accounts: - A & B - last day of the month , C, D & E - Fortnightly
15th and last day of the month.
Quick mortality Statement – Quarterly statement for accounts become NPA within
12months for accounts with liability of Rs. 5 lacs and above.
Business continuity Plan (254/2011) : Branch has been provided with previous day EOD
position of CASA Balancing report on daily basis in CBS Reports Portal (http://cbsreports)
under the link ,http://cbsreports/CASA_Balancing_Business_Continuity, Now previous day
EOD position CASA Balancing Report are forwarded to the respective branches through e-
mail with effective from 6/7/2011 onwards.

BASEL II Framework – Returns 4A, 4B & 4C revised (94/2012) : With effect from
1/2/2012, periodicity of submission of Basel II returns is changed to monthly from
quarterly. Mock returns are being generated as at 15th of every month and on all Fridays
during quarter ends.
Counterfeit Currency Reports. - Branches and Currency Chests are required to submit
counterfeit currency reports (CCRs) within 7days from the date of detection of counterfeit
currency note/s, Counterfeit currency detected in the soiled notes is also to be reported in
the CCR.
AIR ( Annual information Report ) : Last working Day of May every year in which Cash
deposit in SB in a year Rs. 10.00 lacs & more & Credit card payment Rs. 2.00 lacs &
above.
STR-19 ( Deposit & Insurance return ): Last working day of Sept.
Operational Risk mgmt. by branch as & when due
STR ( suspicious transaction report ) : within seven days of identification suspicious
transaction
BALANCING AND RETURNS
1) STR - 18 is a statement for
a) Monthly interest checking b) Q u a r t e r l y s t a t e m e n t of LPD accounts c) Progressive use of
Hindi In Banks d) Report on customer service e) Adherence to KYC/AML guidelines
2) Low Risk Security items are balanced
a) During inspection b) Every second Friday by manager c) Quarterly – last day d) Along with annual
Balance Sheet in March e) As and when new indent is made
3) Balancing of outstanding Bank Guarantees
a) No need to balance b) Monthly last Friday c) Quarterly – last Friday d) Half yearly – last Friday e)
Along with Annual Balance Sheet in March
4) Safe custody articles are to be balanced
a) During inspection b) Yearly along with Balance sheet c) Half yearly last day of March and
September d) Daily e) Whenever Manger has time
5) FCNR (B) account to be balanced
a) Last day of every month b) Last Friday of every month c) Last Friday of every Calendar
Quarter d) Just before Inspection e) No need since, FD is also maintaining the account
6) Balance Sheet and P & L account are to be submitted in
a) STR 11 b) STR 11A c) STR1 d) STR 2 e) STR 19
7) RBI statement is to be submitted on
a) Every Friday b) every last Friday of the month c) Every notified Friday and last day of March
d) Whenever RBI asks for the same e) Along with Balance sheet
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 64 | P a g e
8) PRR12 refers to
a) Twenty point programme statement b) NRE/NRO/FCNR accounts statement to RBI c)
Vehicle maintenance Statement d) Statement of Expiry dates of loan papers (AOD) e)
Statement from PR cell
9) PRR5 refers to
a) BAA return b) Vehicle maintenance return c) DPN return d) VSL return e)Complaints return
10) Sundry Liabilities items are reported in
a) PRR 64 b) PRR 71 c) PRR 12 d) PRR 6 e) PRR 43
11) Monthly statement on sSensitive Sector PSR 67 is submitted on
a) Monthly last friday b) Monthly last day c) Every Friday d) On last Friday of every quarter e) last
day of every quarter
12) PSR 80 deals with performance under new schemes of
a) Priority Sector b) Retail Sector c) Priority and Retail sector d) Non-priority sector e) None of
the above
13) LCCR are reviewed and reconciled in
a) PRR 14A b) PSR 30 c) STR 11 d) POR 21 e) No statement for LCCR
14) PSR 1 is
a) RBI statement b) Balance Sheet c) Flash Report d) Staff meeting report e) Hindi Statement
15) PRR 30 is
a) DICGC returns b) NRE return c) Priority Sector returns d) ISO return e) Complaints Register
BALANCING & RETURNS ANSWERS
1 2 3 4 5 6 7 8 9 10
c c c c c c c d a e
11 12 13 14 15
b a a c e
HRD / STAFF MATTERS
1) Quality Circle means
a) Circle level committee to ensure good customer service b) Voluntary forum in branches/offices to
use the potential & creativity of employees c) A committee set up to find the quality in the product of
any organization d) A system practiced in the bank to recruit good quality staff e) None of the above
2) ESS means
a) Employee Suggestion Scheme b) Employee Safety systems c) Emergency Safety Standards in
the Bank d) Educational Loan Scheme for Staff e) None of the above
3) Mile stone award incentive to employees is (cir 247/2011)
a) Rs. 2000 b) Rs. 5000 c) Rs.1500 d) Rs.1000 e) Rs.10000
4) If a staff is not wearing identity card while on duty it is considered as
a) Minor misconduct b) Major misconduct c) No offence d) Disobedience e) Criminal offence
5) Employee cheque can be discounted at a branch other than the salary paying branch
a) Upto Rs.50000 b) Upto Rs.25000 c) Upto Rs.1 month gross salary d) Upto 1 month
net salary e) No ceiling
6) Performance Appraisal Report for workmen to be sent
a) Half yearly June and December b) Quarterly March, June, September, December c) Yearly,
every March d) Monthly e) No such report
7) Staff meeting is to be conducted in branches/offices
a) monthly b) Quarterly c) Fortnightly d) Any time when the staff are free e) Half yearly
8) For LFC and medical facilities, the term wholly dependent means, income of dependant not
exceeding Rs. per month:
a) Rs.1500/- b) Rs.2500/- c) Rs.3500/- d) Rs.5000/- e) No ceiling
9) To become eligible for Clean Loan Facility, employee should have completed Years of service in the
Bank:
a) 5 years b) 3 years c) 2 years d) 1 year e) No such condition
10) Maximum amount of Group Personal Accident Insurance Coverage for Clerk/ Special Assistant
in “Rest of India (Other than Jammu & Kashmir) for the current year I e 2013- 14
a) Rs.1, 00,000/- b) Rs.1, 50,000/- c) Rs.2, 50,000/- d) Rs.5, 00,000/- e) No such facility
11) Margin on Our Employees Housing Loan (Staff Housing Loan) is:
a) 5% b) 10% c) 15% d) 20% e) 25%
12) What is the maximum quantum of Housing Loan to Clerical Staff Under Employee Housing
Loan Scheme:
a) Rs.30 lakhs b) Rs.12 lakhs c) Rs.8 lakhs d) Rs.5 lakhs e) Rs.1.5 lakhs
13) As per revised limits for Local purchase of Stationery items by branches, branches can
purchase any general item for branch use with per item cost not more than Rs.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 65 | P a g e
 a) Rs.50/- b) Rs.100/- c) Rs.150/- d) Rs.200/- e) Rs.500/-
14) Staff Meeting Expenses per person is
a) Rs.5/- b) Rs.6/- c) Rs.20/- d) Rs.4 /- e) None of these.
15) No service charges are to be levied to staff in respect of
a) AWB/CBS servcies for intracity transaction b) RTGS/NEFT transaction c) Internet Banking
d) a & b above e) all a, b and c above
16) Substaffs are eligible to take up following Delphi Course for
a. Foundation Course b. Development Course c. Specialised course d. a&b
above e. all a, b and c above
17) Cash Incentive for completing foundation course in Delphi
a) Rs.1000/- b) Rs.2000/- c) Rs.3000/- d) Rs.5000/- e) No ceiling

HRD / STAFF MATTERS (ANSWERS)

1 2 3 4 5 6 7 8 9 10
b a b a c a a c b b
11 12 13 14 15 16 17
b a d C e A a

4. GENERAL ADVANCES
Importance of Credit
Credit plays an important role in driving the national economy. It provides leverage to an
entrepreneur to undertake a project larger than what he could have undertaken without availability of
credit. This results in accelerated industrial production/services. It also enables individuals to first
purchase/create assets and repay the loan from their future earnings. Credit enables a consumer to
spend more than what he would have otherwise spent. The increased demand drives the producers to
step up the production. Thus, adequate and cheap availability of credit propels the economy to higher
growth trajectory. But, there is always a time lag between increase in demand and creation of supply
to meet that demand. That is why excessive availability of credit, specially, for non-productive
purposes, puts inflationary pressure of the economy.
Principles of Credit: (a) safety of funds (b) purpose (c) profitability (d) liquidity (e) security (f) risk
spread
Types of Borrowers: A borrower can be (a) An individual (b) Sole proprietary firm (c) Partnership
firm and joint ventures (d) Hindu undivided family (e) Companies (f) Statutory corporations (g) Trusts
and co-operative Societies
The laws applicable to all these different kinds of borrowers and different. Individuals are governed by
the Indian Contract Act, partnership firris by the Indian Partnership Act, Hindu undivided family by the
customary laws pertaining to Hindus, companies by the Companies Act, statutory corporations by the
Acts that created them, trusts by the Indian Trusts Act, Public Trusts Act, Religious and Charitable
Endowments Act, Wakf Act and Co-operative Societies by the Co-operative Societies Act or the
Societies-Registration Act.
Types of Credit: Bank credit can be either fund-based or non fund-based.
1. Fund based credit: In fund-based credit, there is actual transfer of money from the bank to the
borrower.
2. Non Fund based credit: In non fund based credit, there is no transfer of money, but the
commitment by the bank on behalf of the client, may result in future transfer of money to the
beneficiary of such a commitment. For example, a bank guarantee issued in favour of government
departments (or any other beneficiary) on behalf of a contractor. If the beneficiary invokes the
guarantee, the bank will have to remit the amount to it and the client, for whom guarantee was
issued, will be liable to pay this amount to the bank. Thus, a non fund-based credit always has a
possibility of getting converted into a fund-based credit. Other of non fund based credit are letters of
credit, co-acceptance of bills, forward contracts, and derivatives.
3. Periodwise classification: The fund based credit can be short term credit or long term credit (term
loan)
4. Purposewise classification: (a) working capital finance, (b) project finance, (c) export finance,
(d) crop loan, etc.
5. Customerwise classification: Banks classify their credit portfolio on the type of the customers
like, Corporate, retail, agriculture, international, institutional credit, etc.
Segmentwise classification: As per RBI guidelines, banks have to report their business, based on the
geographical segments, as 'domestic' and 'international'. In addition, as per RBI guidelines, banks have
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 66 | P a g e
adopted the following business segments, for public reporting purposes, from March 31, 2008:(a)
Treasury (b) Corporate/Wholesale Banking (c) Retail Banking (d) Other Banking Business
1. Treasury: 'Treasury' for the purpose of Segment Reporting should include the entire investment
portfolio.
2. Retail Banking: The Retail Banking .would include exposure which fulfill the following four
criteria of orientation, product, granularity and low value of individual exposures for retail exposures
laid down in Basel Committee on Banking Supervision document 'International Convergence of Capital
Measurement and_ Capital Standards: A Revised Framework':
(a) Orientation Criterion: The exposure is to an individual person or persons or to a small
business; Person under this clause would mean any legal person capable of entering into contracts
and would include but not be restricted to individual, HUF, partnership firm, trust: private limited
companies, public limited companies, co-operative societies, etc. Small business is one where the
total annual turnover is less than Rs. 50 crore. The turnover criterion will be linked to the average of
the last three years in the case of existing and projected turnover in the case of new entities.
(b) Product Criterion: The exposure takes the form of any of the following: revolving credits
and lines of credit (including overdrafts), term loans and leases (e.g. instalment loans and leases,
student and educational loans) and small business facilities and commitments.
(c) Granularity Criterion: No aggregate exposure to one counterpart should exceed 0.2 per
cent of the overall retail portfolio, 'Aggregate exposure' means gross amount (i.e. not taking any
benefit for credit risk mitigation into account) of all forms of debt exposures (e.g. loans or
commitments) that individually satisfy the three other criteria. In addition, 'one counterpart' means
one or several entities that may be
considered as a single beneficiary (e.g. in the case of a small business that is affiliated to another small
business, the limit would apply to the bank's aggregated exposure on both business).
(d) Low Value of Individual Exposures: The maximum aggregated retail exposure to one
Counterpart should not exceed the absolute threshold limit of Rs.5 crore.
3. Corporate/Wholesale Banking: Wholesale Banking includes all advances to trusts, partnership
firms, companies and statutory bodies, which are not included under 'Retail Banking'.
4. Other Banking Business: Other Banking Business' would include all other banking operations not
covered under 'Treasury', Wholesale Banking' and 'Retail Banking' segments. It will also include all
other residual operations such as banking transactions/activities.

Lending is the principal activity of a Bank. Banks are offering various credit facilities to its clientele. These credit
facilities are classified into: a) Fund based credit facilities; b) Non fund based credit facilities.
Fund based credit facilities: Involve the outflow of funds, ie. direct money is going out, lending out to the
customers like:- a) Cash Credit/ Overdraft; b) Term Loans/ Working Capital; c) Bill Finance
Non fund based credit facilities: In this, the bank's funds are not directly lent to the customers:- a)
Bank Guarantee ,b) Letter of Credit, c) Acceptance Facility
Rule in Clayton's case: The Cash Credit/ Overdraft account is a running account. Whenever the
customer withdraws money, the account being debited and whenever he remits to his account, the
account being credited. Under the law, each item of debit is a separate loan and each credit as a
repayment of the earliest debits. This aspect was enunciated in a case called the "Clayton's case". In that case,
the Court held that the first sum of money paid into the account, is deemed to repay the first item recorded on
the debit side of the account. In another words, "the first credit will go to wipe of the first debit".
Bank not to terminate OD facilities without notice: Once a bank grants an Overdraft facility, then
there is a contract between the bank and the customer that it is not to be cancelled unilaterally.
Term Loan/ Demand Loan: Are granted to customers to meet the capital expenditure needs of the
business. Term loans are granted in one lump sum and are allowed to be repaid over a period in
installments as per the repayment schedule.
Demand loans are those which are repayable on demand through a repayment schedule as agreed
upon by the Bank. Term loans are further classified into :- 1. Short term loans, 2.Medium term loans
;3.Long term loans. Short term loans — repayable within one year , Medium term loans —
repayable within one to seven years , Long time loans — repayable above seven year. The
limitation period for filing a suit in case of term loans is 3 years from the date of default of a particular
installment. In the case of demand loan the time limit is 3 years from the date of default.
Bill Finance: Bill Financing is conducted through discounting of Bills of Exchange drawn by the
borrower on the customers of borrower. Bill Financing is classified into 3 categories :- a Bill
discounting and bill purchase; b. Drawee bill acceptance, c Bills Co-acceptance
In all these cases, Bank undertakes an obligation. The first two are fund based and the third is a non
fund based facility.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 67 | P a g e
Other Credit Facilities: Many banks are extending Housing loans, Car loans and other Consumer
loans. These are called consumer credit which contributes significantly to increase the profit of
banks.
SECURED AND UNSECURED LOANS
Secured Loans: These loans are given by a banker not merely based on his confidence on the
borrower's future financial strength, but based on his net worth. The Banker accepts securities
such as LIC bond, fixed deposit receipts, shares, mortgage of land and building etc.
Unsecured Loans: The loans which are given without any tangible security or assets but merely on
the
strength of the integrity or the "credit worthiness" of the borrower. In other words credit worthiness is
the confidence of a Banker on the future solvency of a person. They are also called clean loans.
Why secured loans: The recovery of the loan is mostly depended on the economic success of the
borrower. Success or failure of an economic activity depends on various macro and micro economic
factors. The banker cannot predict success or failure of the activity. So the bank asks for further
security in the form of charge on property of the borrower. This charge acts as a cushion to absorb
the shocks of economic failure of the borrower, and the bank can sell the properties and recover the
money.
Registration of firms: It is in the interest of the partners to get their partnership firm registered.
For registration, the prescribed application along with all details such as name of firm, principal place
of business, names and addresses of partners etc. to be sent to Registrar of firms remitting the prescribed fees.
The registration of firm is optional and not compulsory. So a mere non-registration would not affect in carrying on
business. The Partnership Act contemplates the registration of firms, not the partnership deed.For making any
alterations in the name of firm, shifting of place of business etc, for that also application in the prescribed
format to be sent to the Registrar. The Registrar has power to make any rectification entry in the Register of firms in
conformity with the documents relating to that firm already filed with him.
Effect of non-registration: Sec 69 of Indian Partnership Act, 1932 sets out the effect of non-registration.
Suits by Partners in between themselves: If the firm is not registered the partners can not file a suit against any
other partner or against the firm in the event of any problem arises.
Suit by the firm against third parties: The firm cannot file a suit against any third parties to settle any claim or
recovering any dues from third parties.
Filing of suit by third parties against the firm: Whether the firm is registered or not, third parties are not restricted
from filing suit against the firm or any other partner(s). That is, even if the firm is not registered,
third parties have no bar in filing suit against the firm. It is not the look out of third parties whether the firm is registered
or not. But for the firm, if it want to file a suit against the partners or against Third parties it is
mandatory that the firm should be a registered one. In other words, it is in the interest of the firm or its partners
to.have the firm registered. This is the most important part to be reckoned with.
Incorporation of a Company
Company: A company is an artificial person, since it is created by law. It is clothed with many of the rights,
liabilities, powers and duties prescribed by law. Among the two important characteristics of a company, one is its
separate individuality and the other is perpetuity within the limits prescribed by law. It can do all acts as a natural
person may do.
A company has a 'corporate personality' separate from all the members who have formed it unlike a partnership
firm. Because of this, a company incurs all the liabilities and possesses all rights of a natural person subject to the
registration of law.
The main characteristics of a company are summed up as under:-
a) Company is a voluntary association of persons who have come together to carry on some business for
profit.
b) It has a perpetual existence and though members may come and members may go, the company continues
forever. Change in its members or in their identity does not affect the legal existence or its
identity. Only law can dissolve it, since it is a creation of law.
The shares of joint stock companies are freely transferable unlike a private limited company. As a corporate person,
a company is entitled to own and hold property in its own name. A company being a
body corporate can sue and be sued in its own name. In brief, the most striking features of a company are its distinct
legal personality, the easy transferability of its shares, and the limited liability of its members.
Name of company: A company is known by its name. So before registration, the Registrar of Companies
will see whether there is any company identical with or too nearly resembles the name of an existing
company. conclusive evidence that everything is in order as regards registration and that the company has come.
Certificate of Incorporation: The certificate of incorporation issued by the Registrar of Companies is into
existence.
Certificate of commencement of business: Private Companies and a company having no share
capital can start the business activity after the obtention of certificate of incorporation. But for a
Public Company, another certificate called Certificate of Commencement of Business is to be obtained
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 68 | P a g e
from the Registrar of Companies. (ROC) but now changed as per company act 2013 and now all
company has to file compliance certificate.

REGISTRATION AND SATISFACTION OF CHARGES

What is a charge: the word 'charge' is used to mean any form of security or debt. Sec 125(4) of the
Companies Act, 1956 provides the following charges of a Company are to be registered with Registrar
of Companies:- a) A charge for the purpose of security debentures, b) A charge on uncalled Capital of
the Company, c) A charge on immovable property ; d) A charge on book debts e) Charge on asset in
or outside India
Fixed charge: Also called 'specific charge'. It extends over a specific property of the company. It
gives right to the creditor to sell the property and claim the proceeds towards the dues payable by
the Company.
Floating charge: Means a charge that is general and not specific.
a) Floats over the present and future property of the Company, and it do not attach any specific
property.
b) On happening of an event or contingency, crystallizes as a fixed charge. A floating charge is an
equitable charge which does not attach on any specific property but covers the whole of the
company's property.

Effect of floating charge becoming fixed charge: When a floating charge becomes fixed charge,
it constitutes a charge upon all the property or assets then belonging to the company.

Registration of charge: All the charge created by the Company shall be filed with the ROC within 30
days of its creation. It can be extended by Registrar of Company for another 270 days. The
registration, modification and satisfaction of charge are to be filed in form No CHG – 1& CHG-4 in
MOC21. Recently Government of India has introduced electronic filing of returns.

Effect of non-registration: If the charge created is not registered with ROC, the charge would not
be valid against the liquidator and any other creditor of the Company in the event of winding up of
the company, as against the company itself. So long as the company does not go into liquidation,
the mortgage or charge is good and may be enforced.

Sec 142 empowers ROC to impose penalty on the Company if it fails to comply with the provisions
relating to registration of charge.
Sec 144 provides that any creditor or member of company can inspect the books relating to
charges created by the Company and it is the duty of the Company to keep the register of charges
open to inspection

CHARGING OF SECURITIES AND DOCUMENTATION

I INTRODUCTION
1. Charging a security means creating right'of the creditor (bank) over the security so
that in case of default by the borrower, creditor (bank) can realize the security to recover
its advance.
2. Fixed & Floating Charge: A charge could be fixed charge or floating charge. Fixed charge is
created on specific property like land, building etc whereas floating charge is an equitable
charge over the assets of the company. A floating charge crystallizes when the company ceases
to be a going concern or the charge holder (bank) initiates action to enforce security for
recovery of the amount of loan.
1st,
3 2nd and pari passu charge: When charge is created in favour of more than one creditor,
then the creditor in whose favour the charge was created earlier will have the first charge and
any subsequent
charge will be called as 2nd charge and so on. If a charge is created in favour of several
creditors with the condition that all creditors will have equal priority in proportion to the
amount of their advance it is called as Pad passu charge. When consortium advance is granted
thistype of charge is created by the borrower. In case of pari passu charge sale proceeds of the
property are shared among creditors in the proportion of their outstanding within sanctioned
limits.
II TYPES OF CHARGES
Charge on securities can be created by various methods depending on the type of security
charged.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 69 | P a g e
Nature of Charge Type of Security Defined in
Pledge Hypothecation Moveable Goods like stocks Sec 172 of Indian Contract Act Sec 2
Moveable Goods like stocks, of SARFAESI Act
Lien vehicles,
Mortgage Moveable goods & security Sec 171 of Indian Contract Act Sec
Immovable Property 58 of Transfer of Property Act
Assignment
Book Debts, LIP, NSC, FOR, Sec 130 of Transfer of Property Act

Type of Security Nature of charge

Stocks, vehicle, movable plant and machinery Pledge, Hypothecation, Lien
Land and Building Mortgage
Assignment, Hypothecation
Book Debt
LIP, FDR, NSC, KVP, Supply Bill AssIgnment
Shares and Debentures, Bonds, Lien
Railway Receipt Pledge
PLEDGE
1. Pledge is defined in section 172 of Indian Contract Act.
2. Pledge is the bailment of goods as a security for payment of a debt or performance of a promise.
3. Bailment is defined in Indian Contract Act. Bailment means delivery of goods with some purpose
and with the condition that when the purpose is accomplished the goods will be delivered back to
the bailor.
4. The person pledging the goods is called Pledgor or Pawer and the person in whose favour
pledge is done is called pledge or pawnee.
5. Piedge is done on movable goods and securities and nature of charge is fixed.
6. The essential ingredient of pledge is delivery or transfer of possession. The person who delivers
the goods is called as the pledgor and the person to whom the possession is delivered (bank) is
called as the pledgee.
7. In the case of pledge, the ownership remains with the borrower and possession is transferred to
bank.
8. The pledge advances are also called as Lock & Key limits.
9. In case of pledge, the transfer of possession can be actual as in the case of physical delivery
of goods, constructive as in the case of transfer of document of title of goods. The pledge can
be created by owner of goods, or the agent of the owner.
10.If goods pledged belong to limited company, charge is not required to be registered with ROC.
11.There is no limitation period for exercising rights under plege,
12.Obtigations of bank as a pledgee: The bank as a pledgee must take care of the goods
pledged as a person of ordinary prudence would take of his own goods of the same value,
bulk and quality.
13.Rights of the bank as a pledgee: (I) Bank can sell the goods without intervention of the court in
case the
pledgor fails to repay the bank loan after giving reasonable notice to the pledger. (ii) Bank as a
pledgee has priority in right over the goods and Bank's right of sale under pledge cannot be
extinguished even by lawful seizure of goods pledged to it. The only exception to this rule is in
case of wages and salaries of workers and in this case the charge of the workers and the bank
will be pari passu.
HYPOTHECATION
1. Hypothecation is defined in Section 2(n) of Sarfaesi Act.
2. Under hypothecation ownership as well as possession remains with the borrower i.e.
neither ownership nor possession is transferred to the bank.
3. Therefore, the major difference between pledge and hypothecation is on account of possession.
4. In the case of Hypothecation nature of charge is equitable charge. (Also referred as floating
charge)
5. If goods in a show room which keep on changing are hypothecated, the nature of charge is
floating charge.
6. Bank can take over possession of hypothecated goods either with the consent of borrower or
by enforcing rights under Sarfaesi Act.
7. When bank has definite information that the borrower is selling the goods with rnalafide
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 70 | P a g e
 intention, the bank can bring criminal proceedings for breach of trust.
8. If advance is given to a limited company against hypothecation of security, charge is required
to be registered with Registrar of Companies.
Hypothecation is preferred to pledge where it is not practicable or it is difficult to create
pledgee. It is also allowed where pledge can impede borrower's business.
ASSIGNMENT
1. Assignment is transfer of right or interest over actionable claims. The transferor of claim is called
as the assignor and the transferee is called the assignee.
2. As per Section 3 of Transfer of Property Act Actionable Claim means a claim to any debt other
than debts secured by mortgage, hypothecation, pledge, or to any beneficial interest in immovable
property, which is not in one's possession. The debt or beneficial interest could be present or
future, conditional or contingent.
3. Assignment is done on unsecured debts like Book Debts, Supply Bills, LIC policy, fixed deposit
etc.
4. Assignment can be done only through an instrument in writing, signed by transferor or his agent,
clearly indicating his intention to transfer. A notice of assignment should be sent to the debtor so
that debtor becomes liable to the assignee. As per sec. 131 of Transfer of Property Act, the notice
of assignment must be in writing and should be signed by the assignor/his agent. However, if the
assignor refuses to send such notice, assignee may send the notice of assignment indicating the
refusal of the assignor to sign the same.
5. Charge on book debts can be created by way of assignment or hypothecation.
6. Assignor cannot give better title to the assignee than what assignor has.
7 . In case of default, the assignee can recover the actionable claim amount from the original debtor
without reference to assignor.
8. MORTGAGE
1. Mortgage is defined in Section 58 of the Transfer of Property Act.
2. Mortgage is the transfer of interest in a specific immovable property, for the purpose of securing
an existing or future debt or for the performance of an engagement which may give rise to a
pecuniary liability. The person creating the mortgage is called as the mortgagor and the person in
whose favour mortgage is created (bank) is called as the mortgagee.
3. Immovable property, means land and things attached or permanently fastened to the earth.
4. Types of Mortgage: There are six types of mortgages namely (i) Simple Mortgage (ii) Mortgage
by Conditional Sale (iii) Usufructuary Mortgage (iv) English Mortgage (v) Mortgage by Deposit of
title Deeds (Equitable Mortgage) and (vi). Anamalous Mortgage. Of these, all • mortgages except
Equitable Mortgage require registration with the Registrar of Assurances.
5. Registered Mortgage: In the case of registered mortgage (also called legal mortgage) first a
mortgage deed is written which is stamped as per Stamp Act of the concerned state. The deed is
then executed in the presence of two witnesses. Thereafter, in terms of the Indian Registration Act
1908, it is to be registered with the Registrar of Assurances (Sub Registrar) within 4 months of the
execution.
6. Simple Mortgage: In simple mortgage the mortgagor makes himself personally liable to pay the
debt and agrees that in the event of failing to pay according to his contract, mortgagee can get the
property sold through the intervention of the court. If after sale of property some debt is still
outstanding, the borrower shall be- personally liable for the outstanding amount. Neither the
possession nor ownership of the property is transferred to the mortgagee. The mortgagee cannot
exercise the right of foreclosure.
7. Mortgage by Conditional Sale: The mortgagor ostensibly sells the property to the mortgagee
upon the condition that if the debt is paid in time the property will be transferred back to him and
in case of nonpayment within the specified time the transaction would become a real sale. There is
no personal liability of the mortgagor. In case of default, the mortgagee can exercise his right of
foreclosure through court.
8. Usufructuary Mortgage: In this mortgage, possession of the property is transferred to the
mortgagee. The mortgage money is recovered through income of the mortgaged property. There is
no personal liability of mortgagor.
9. English Mortgage: As in the case of simple mortgage, the mortgagor undertakes personal
liability to pay the debt. He transfers the ownership of mortgaged property to the mortgagee upon
a condition that property must be transferred back to him on payment of debt. Mortgagee can sell
the mortgaged property even without the intervention of court.
Equitable Mortgage
1. Equitable Mortgage is called as Mortgage by Deposit of Title Deeds.
2. It can be created by mere deposit of title deeds of property with intention to borrow.
3 a.Title deeds should be deposited at Mumbai, Kolkata, Chennai ( Presidency Towns) or any other
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 71 | P a g e
town notified by the State Government in this regard. It is not necessary that the title deeds should
be deposited with the branch or at the place where the loan is being raised.
3 b.These can be deposited anywhere in India at a notified place.
it is not necessary that it should be within bank branch premises. Mortgagor can deliver the title
deeds to an authorized representative of the bank at mortgagor's residence or other place provided
it is in a Notified Centre.
4. The property to be mortgaged may be located anywhere in India (For example, for property
located in Delhi, title deeds can be deposited at Chennai.
5. Equitable Mortgage does not require registration with Registrar of Assurances. But in case of
a limited company, charge in yespect of equitable mortgage under Section 125 of the
Companies Act, 1956 must be registered with Registrar of Companies.
6. A title deed can be a sale deed, lease deed, partition deed, gift deed, deed of assignment,
deed of relinquishment, or such other documents. Agreement to sale is not a title deed.
7. Normally a bank should insist for original title deeds but in exceptional cases equitable
mortgage can be. created even by certified copy of the title deeds.
8. Property located in cantonment areas should not be accepted for equitable mortgage, without
clearance from cantonment authorities.
10.The bank should not part with the title deeds even for a short duration at the request of the
mortgagor because if some other creditor is induced to finance on the basis of title deeds, the
bank may Lose priority over the mortgaged property.
Legal Opinion and Search Report: Before accepting mortgage of immovable property, legal
opinion should be
e obtained that the property is fit for mortgage and search should be conducted in the records
of Registrar /Sub
Registrar for at least 12 years to ensure that the property is free from prior encumbrance.
Priority of Mortgage: The priority of the mortgage is considered from the date of execution of
the mortgage deed (in the case of registered mortgage) or from the date of creation of mortgage
by deposit of title deeds and not with reference to the type of mortgage or date of registration.
Right of Redemption: Right of the mortgagor to get back his mortgaged property on
repayment of the loan, is called as the right of redemption. This is available in all types of
mortgages.
Right of foreclosure: The right of the mortgagee to deny the mortgagor of the property to
exercise his right of redemption i.e. debarring the mortgagor for ever to get back the mortgaged
property is called as the right of foreclosure. This right is available to the mortgagee in case of
mortgage by conditional sale.
Ill. TYPE OF SECURITIES
1. Advance against Shares: Following points should be considered while granting advance
against shares:
(a) Bank should not grant advance against security of partly paid shares because these
represent contingent liability. Moreover, it is prohibited by RBI.
(b) Amount of advance: Loans against the security of shares from the banking system,
should not be more than Rs 10 lakh per borrower if the shares etc are held in physical
form and not more than Rs 20 lakh per borrower if these are in dematerialised form.
(c) Margin: Minimum margin of 50 percent of the market value of equity shares/convertible
debentures held in physical form. For demat shares margin is 25%.
(d) In case advance is granted to an employee for purchase of shares of his own company,
then the amount of advance can be up to 90% of the value.
(e) Minimum 50% margin be maintained for guarantee issued on behalf of Brokers of which
at least 25% should be cash margin.
2. Advance against supply bills: Supply Bills or Receipted Challan are not document of title
goods. These are in the form of invoice regarding goods supplied for which payment is yet to
be received. Banks get irrevocable power of attorney for receiving proceeds of supply bills
direct from Government department and get it registered with department or Corporation.
3. Advance against Life Insurance Policy:
(a) Advance should be allowed against endowment policy.
(b) The amount of loan is linked to the surrender value of the policy. Surrender value means
amount payable by the insurance company, upon surrendering the policy.
(c) Life insurance Policy is charged to bank by way of assignment. The policy should be
assigned in favour of the bank on the policy itself and be witnessed by a person.
(d) There is no role of nominee while granting advance against LIP. The assignment is to be
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 72 | P a g e
 done by the assured only.
Margin: Margin is the cushion against decline in value of securities as also borrower's stake in
the business. Drawing Power is calculated after deducting margin from value of goods. For this
purpose, market value or cost price whichever is lower is considered. Drawing power may
workout to be more than limit then it is called as notional drawing power but it is limited to the
sanctioned limits.
Insurance: Goods are insured for their full value otherwise average clause will be applicable.
Average clause means that if goods are under insured then in the case of damage to goods,
claim will be proportionately.
GUARANTEE
1. Guarantee is defined in section 126 of Indian Contract Act.
2. There are three parties to a contract of guarantee namely principal debtor, creditor and surety.
3. The contract of guarantee is not a contract of utmost good faith. Therefore, bank is not
supposed to disclose-, all information regarding loan account being guaranteed. However, ii
the surety makes specific enquiry bank must disclose facts to surety otherwise he can avoid
liability.
4. A Guarantee which is for a single transaction like term loan is called specific guarantee. A
Guarantee for series of transactions like in cash credit or overdraft is called continuing
guarantee.
5. The liability under guarantee is a contingent liability and surety is liable on default by the
principal debtor_ Once there is a default, the liability of the surety is co extensive with the
principal debtor.
6. When on default by principal debtor, a guarantor makes payment on being called by the
creditor, he becomes entitled to all rights and remedies which creditor had against the
principal debtor. This right of the surety is called Right of Subrogation.
7. If a surety revokes guarantee then he will be liable for the amount outstanding in the account
at the time of revocation and interest thereon. However, if guarantee is continuing like in case
of cash credit, surety is required to issue notice and he will be liable for the amount
outstanding in the account on the expiry of notice period and interest thereon.
BANK GUARANTEE
Bank Guarantees are of three types namely (a) Financial Guarantee (b) Performance Guarantee
(c) Deferred Payment Guarantee.
1. Financial Guarantee: When a customer of the bank is required to deposit some amount with
court or revenue authority or earnest money and guarantee is issued in lieu of such money,
it is called Financial guarantee.
2. Performance Guarantee: This type of guarantees are meant for performance of contracts
entered into by the customers.
3. Deferred Payment Guarantee: This type of guarantee is issued when the bank's customer
purchases some machine etc on deferred payment basis and that payment is guaranteed by
the bank. Deferred payment guarantee is a type of financial guarantee.Both bank and the
purchaser of machinery prefer this type of guarantee as neither is required to part with
funds immediately. Basic difference between Term Loan and Deferred Payment Guarantee is
on account of outlay of funds. In term loans funds are disbursed immediately whereas in
case of DPG, bank is required to make payment when the purchaser of machinery defaults.
Appraisal of the DPG proposal is done just like that of a term loan
4. Maximum period for guarantee: Generally maximum period can be up to 10 years. However,
banks have been allowed to issue guarantee for more than 10 year also.
5. Liability of Bank: In the case of guarantee, the liability of bank is contingent liability and it is
shown as a footnote to the Balance Sheet.
6. Limitation period in a guarantee: As per amendment to Section 28 of Indian Contract Act,
limitation period for enforcing claims under Bank guarantee is 3 years (30 years in case of
Govt) from the date of invocation or stipulated expiry date whichever is earlier.
Stamping of Loan Documents
1. Indian Stamp Act extends to whole of India except Jammu & Kashmir.
2. There are certain documents on which stamp duty is prescribed by Central Government.
These documents are Promissory Note, Bill of Exchange, Cheque, Bill of Lading, Letter of
Credit, Share Transfer Form, Debenture, Proxy, Insurance Policy and Money receipts.
Therefore, duty on these documents will be same throughout India except J&K. On all other
documents, the stamp duty rates are prescribed by the State Govt. Such documents are
Power of Attorney, Agreements, Guarantee Bond, Indemnity Bond etc.
3. Documents which require stamping should be stamped before or at the time of execution.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 73 | P a g e
 4. If adhesive stamps are used on any document, these must be effectively cancelled by
signing across the stamp or in some other effectual manner. If these are not cancelled
effectively, the document will be treated as unstamped.
5. If a document is unstamped or under stamped, it will not be admissible in a court of law.
Such documents can be validated by payment of deficit stamp duty and penalty. The amount
of penalty can be up to 10 times the deficiency subject to a minimum
of Rs 5.
6. Document executed in different states: Where a document is to be executed by persons in
different States, it must bear the stamp duty as applicable in the State where the first
person signs the document. In case the stamp duty is more in the second State then the
difference is to be paid before it is signed by the person in the second State. Where one of
the States is Jammu & Kashmir, full stamp duty applicable to both the States are payable.
7. Documents executed outside India: If a document other than a promissory note or bill of
exchange is executed outside India, it should be stamped as per Indian Law within three
months after their first receipt in India. Therefore, documents like a power of attorney or an
Agreement executed outside India must be stamped within three months of their first receipt
in India. In the case of A promissory note or a usance bill of exchange is executed outside
India, it should be stamped by its first holder in India before presenting the same for
acceptance, payment, or negotiation.
STAMP DUTY RATES
Instrument Rate (R91
Receipts-for any money or property the amount or value of which 1.00
Proxy letter 0.15
Letter of credit 1.00
Transfer of shares (Rs.100 or part) 0.25
Demand bill of exchange Nil
Usance Promissory Notes/Usance Bills (As per period of usance and amount of bill; for example
the stamp duty is 62 paise per Rs 1000 and for usance up to 6 months the duty is Rs 1.25 per
exchange with usance not exceeding three months drawn on/drawn by/made in favour of a
. bank and representing a genuine transaction are completely exempted from stamp duly. For
usance export bills of exchange, no duty is payable, as per Central Govt. notification dated July
08, 2004.
Demand promissory note:
-value not more than Rs.250 0.05
-value > Rs.250 but up to Rs.1000 0.10
-Value > Rs.1000 0.15

Limitation of Loan Documents

1. Law relating to limitation is contained in the Limitation Act, 1963 which is applicable to
whole of India except & K.
2. Period of Limitation : It is the time limit within which legal remedy can be sought in a court
of law to enforce the right. The limitation period bars the remedy of filing a• suit but does
not take away the right or recovering the debt_ Therefore, there is no limitation period in
case of pledge or lien or set off.
3. Date of execution of a document is excluded for the purpose of ascertaining limitation period
of a document. Thus, a suit based on a DPN dated 5.4.2007 can be filed latest by 5.4.2010.
4. If the courts are closed on the day the limitation period expires, case can be filed on the day
the court reopens
5. While calculating limitation period, the period for which the executant was out of India should
be excluded.
6. Prescribed period of limitation cannot be extended / waived by mutual agreement.
7. The banker's right of general lien / set-off / sale of pledged goods is not barred by the law
of limitation. There is no
limitation period for resorting to these methods I remedies. The legal remedy i.e. the right
of suing the borrower in his personal capacity can be sought only within the prescribed
limitation period .
8. Extension of Period of Limitation: Period of limitation can be extended by Acknowledgement
of debt or part payment. In both cases, limitation period will start from the date of
acknowledgement or part payment; The acknowledgment or part payment should be by the
borrower himself or his agent specifically authorized for this purpose; Acknowledgement or
part payment should be before the expiry of limitation period. Once the limitation expires it
can not be extended by part payment or acknowledgement of debt; The stamped
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 74 | P a g e
 acknowledgement of debt by the borrower before the expiry of documents does not
automatically extend the period of limitation against the guarantor. Similarly, the
acknowledgement of debt signed by the principal debtor and a surety does not bind another
surety who has not joined in signing the acknowledgement / revival letter of debt; An
admission of debt in the balance sheet filed by a firm before the I.T. Authority also extends
the period of limitation from the date of (signing) the balance sheet. Such an
acknowledgement does not require to be stamped. The balance sheet. constitutes sufficient
acknowledgement of debt in writing; In case limitation expires in a particular case, the
liability can be revived by obtaining fresh promise to pay the outstanding debt. As per
section 25 (3) of Indian Contract Ac, a time barred debt is a valid consideration.
Description Period of Limitation
Temporary Overdraft without DPN 3 years from date of loan
Demand Loan 3 years from the date of loan
Demand Promissory Note 3 years from date of DPN
Bill of exchange_payable on demand 3 years from date of Bill.
Usance bill of exchange or promissory note 3 years from the due date of the bill or PN •
-Suit for Money_ Decree 3 years from the date right is due
Term Loans payable by instalments 3 years from due date of each instalment . .
Mortgage 12 years from the due date of the loan
Right of foreclosure by the mortgagee 30 years
Right of redemption 30 years
Cash credit against hypothecation or overdraft 3 years from the date of document.
Cash Credit Pledge Not applicable
Any suit by State/Central Government 30 years from the date when limitation would
Deposit like SB, CA, FD with a bank start
3 years from date of demand
Execution of Decree 12 years from the date of decree
Recovery of loss caused by fraud 3 years from the date of detection of fraud
Claim under Consumer Protection Act 2 year from the date light accrues
Dishonour of cheque under sec 138 of NI Act 1 month from the date right accrues
Appeal to High Court against Lower court 90 days from date of decree
Appeal to other courts on the decree at Lower 30 days from date of decree
court
Execution of Decree 12 Years from the date of Decree
Recovery of Loss caused by Fraud 03 years from the date of Detection of frauds

Credit Risk Management Policy

 Thrust Areas: Agriculture, MSME, Export segment, Other Priority, Manufacturing Sector, Service
Sector etc. Non-Thrust Areas: Commercial Real Estate, NBFCs, Capital Market & Industries
which do not have growth potentials.
 Prudential exposure limit to a single borrower: 15% of bank‘s capital funds for Low Risk &
Normal Risk customers, and 5% additional exposure for infrastructure projects. (RBI has
enhanced this limit to 25% for Oil Companies with 5% leverage to go beyond 25% in case of
need.) For Moderate Risk Borrowers: 12% of capital funds (additional 3% for infrastructure
projects) and for High Risk Borrowers: 8% of capital funds with 2% extra for infrastructure.
 For group accounts, as prescribed by RBI.(regulatory limits i.e. 40% of capital funds. For
Infrastructure lending, it can be 50% of capital funds). Board can permit 5% extra limits, with
in regulatory limits.
 Consortium Financing: No ceiling on number of banks but each bank‘s share should be atleast
10% of total Fund Based limits. Can be reduced selectively.
 Prudential exposure limit for individual non corporate borrowers, which can be permitted by
concerned sanctioning authorities : Individuals – Rs.10 crores.
 Proprietorship : Rs.50 crores, Association/HUF- Rs.30 crores, Trust/Society-Rs.75 Cr &
Partnership concerns: Rs.75 crores, Educational Institutions & Hospitals Rs.100 cr, LLP 100
crores. [469/2013, 268/2014]
 Exposure to Real Estate : 20% of Gross Credit and to Commercial real estate sector should not
exceed 5% of Gross Credit.
 Project Parameters for Real Estate: DER not more than 3:1, Promoters contribution: Not less
than 25% + 25% advance money. (margin 40% only if land is purchased from Govt.) FACR 2:1
and above for Term Loans, Repayment 7 to 10 years including moratorium period.
 Canara Rent and Canara Mortgage comes under Commercial Real Estate Sector.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 75 | P a g e
  Financing Producers of Feature Films: Bank Finance Maximum: 35%, Margin: 25%, advance
from distributors: 40%.
 Borrowers (Corporates and other constituents) having sales turnover of over 50 crores shall
disclose ―Ageing Schedule‖ of their overdue payables in their periodical returns/statements
submitted to the Bank.
 Loans to individuals against shares – Maximum Rs.20 lakhs for Demat shares and 10 lakh for
physical form shares, from entire banking system 
 Margin on shares: 50%
 For subscribing to IPOs, maximum quantum is Rs.10 lakhs only.
 Under ESOP scheme, finance upto 90% of the purchase price with maximum Rs.20 lakhs. (If
the borrower is having another loan against shares, total quantum including ESOP should not
exceed Rs.20 lakhs).

Categorisation of branches: Small – Total business upto Rs.5 cr.

 Medium - >Rs.5cr. Upto Rs.25 cr.
 Large - >Rs.25 cr and upto Rs. 75 cr.(with min 10 crore advances)
 Very large: >Rs.75 cr upto Rs.250 cr.(with min.25 cr advances)
 Exceptionally large: Above Rs.250 cr. Upto Rs.1000 crores with min.adv. Rs.100 cr.,
 Premier Branch : Above Rs.1000 crores with minimum .advance. Rs.750 crores. Heading:
Small- Scale I with min.4years experience, medium – Scale II, Large – Scale III, VLB-Scale IV,
ELB-Scale V, Premier Br-Scale V
LOAN AGAINST FCNR DEPOSIT IN FOREIGN CURRENCY: Upto 90% : 2% above ROI offered or
2% above LIBOR/SWAP rate for the period of loan, whichever is higher,Beyond 90% to 100% of
deposit: 2% above stipulated rate.
LOAN AGAINST FCNR IN INDIAN CURRENCY: Upto 90% : 11.00% (Base Rate + 0.5%)
90% to 100% : Above rate + 2%,Beyond 100% : Clean Rate
LOAN AGAINST FCNR THIRD PARTY DEPOSIT:Upto 75% : Base Rate + 3%,Beyond 75%: Clean
Rate,Loans against NRE/FNCR deposits, in Indian Currency, closed before maturity where minimum
stipulated period is not completed:Against NRE/NRO deposits: 16.50% (Base Rate + 6%)
 Against FCNR : LIBOR + 2.5%
Issuance of Solvency Certificate:(Cir 433/2010)
 Solvency Certificate should be issued only on behalf our customers.
 Branch in charge of Small/ Medium/ Large branch, Credit Manager/ SM/ CM of VLBs and AGM
of ELB can consider/ issue Solvency Certificate.
 To the extent of declared net worth of the party up to Rs.1 lakh without insisting any
financial statements.
 To the extent of accepted networth of the party on the basis of unaudited financial
statements beyond Rs.1 lakh upto Rs.5 lakhs.
 To the extent of accepted networth of the party on the basis of audited financial
statements beyond Rs. 5 lakhs.
 Commission to be collected @ 0.10% with minimum of Rs.500 and maximum of Rs.10000
per certificate.
Issuance Of Capability Certificate:(Cir no.433/2010)
 Capability Certificate is issued to our customers for submission to Government Departments or
to other Organisations for considering their tender application, for execution of contract or for
similar other purposes.
 Certificates are insisted to assess the capability in performing the work order/contract
entrusted to them.
 Certificate is to be issued for the amount of average performance during the last 3 years. If
the performance during the last 3 years shows an increasing trend, the certificate may be issued
for an amount equal to last 3 years performance plus average increase during the last 3 years.
 Commission to be collected @ ` 1 per Rs.1000 with minimum of Rs.100 and maximum of
Rs.500 per certificate.

Credit Information Companies

1.CIBIL- for consumer and commercial segment

2.Experian CIC India Private Ltd-for consumer segment only
3.Equifax Credit Information Services Pvt Ltd- for consumer segment only
4.4. CRIF High Mark Credit Information Services Pvt Ltd
Exempted Categories : Staff Loans and loans against own deposit. Though CIR is
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 76 | P a g e
 mandatory, sanctioning authority may consider following proposal irrespective of risk
grade: DRI Loan, Government Sponsored Scheme with loan upto Rs 2 Lacs, Canara
Pension Loan, Gold Loan. Agriculture Loan upto Rs 3 Lacs , Fully secured loans upto
Rs 2 lacs under non priority sector , education loan and renewal of existing facilities.
In case of CIBIL, there are 3 scores Viz. Trans-union Score version 1, Trans-union
score version 2 and personal score. Trans-union score version 2 shall be reckoned.

Criteria for drawing second CIR apart from CIBIL.

For Secured loans :HL above Rs 10 Lacs , Car Loan & all other secured loans
(including EL) above Rs 5 Lacs, Agriculture Loan above Rs 3 Lacs, MSME segment and
all other loans above Rs 10 Lacs .
For Unsecured Loans : Two CIRs to be obtained In personal segment ,Personal loan
above Rs 1 Lac ,EL above Rs 4 Lacs and all other loans above Rs 3 Lacs , Agricultural
segment Rs 1 Lac , MSME loans above Rs 2 Lacs and all other loans above Rs 5 Lacs.
Charges: Rs 50/- per CIR from individual, Rs 500/- for commercial report .
Delegation of power:
For Credit Score 1, 2 and 3 → respective sanctioning authority
For Credit Score 4: Upto DGM-CO-CAC (except circle head) → NHA, Circle head CAC & above →
Respective Sanctioning authority
For Credit Score 5: Circle head CAC and above authorities
Renewal of existing facility can be considered by respective sanctioning authority irrespective of Risk
Grade.
Applicable in J & K : NI Act , SARFAESI Banking Ombudsman Not applicable in J & K: Service Tax,
Consumer Protection Act, DRT
Criteria
1.Credit Audit : Above Rs 1 Cr . Randomly in 5 % of account having limits less than
Rs 1 Cr . To be conducted within 3 months of first disbursement but before six
months .Max fee payable to auditor is Rs 5000/-. For exposure upto Rs 5 Cr , review
by circle head. For exposure above Rs 5 Cr revies by GM CA & M wing.
2. Pre Release audit :Rs 5 Cr & above . Within 48 hours of documentation. Audit by Scale
III/IV authorities
3. Legal Audit: Rs 5 Cr & above. Max fee to advocate is Rs 5000/-. Part of RBIA
and done till loan is fully repaid
4. Stress Audit: Rs 50 Cr & above in standard assets. Annually by inspecting
officers. No closure report is stipulated.
5. Advisory Committee: All compromise proposal having sacrifice of Rs 1 Cr and
above.. Committee consist Retired high court judge and two former Bankers ( Min
ED Rank or Dy MD of SBI)
6. Lok Adalat : upto Rs 20 Lacs . Legal Services Authority Act 1987
7. DRT Lok Adalat : Above Rs 20 Lacs
8. DRT : Rs 10 Lacs & above. Narasimhan Committee. Bank & Financial institution Act 1993
9. Corporate Debt Restructuring: Rs 10 Cr & above . Shyamala Gopinath Committee
10. Red Flagged Account (RFA): Threshold on Early warning Signal and RFS is
Rs 500 million (Rs 50 Cr ) 11.Non-Cooperative Borrower: Rs 50 million ( Rs 5
Cr)
12.HOS/QOS: FB + NFB Rs 5 Cr & above .Penal 1 % on FB and 0.25 % on NFB on
liability for the delayed period ( entire quarter) .NFB liability alone cap on penal is Rs
1 Lac. To be submitted in 6 w/8 w from the end of quarter /HY
13.Stock Audit: Once in a year . LR → above Rs 5 Cr , NR/MR/HR/unrated →
above Rs 1 Cr . Doubtful → once in two year for liability below Rs 5 Cr and every
year for liability above Rs 5 Cr
14.Project appraisal Report for medium and long term loan : New
Borrower → Rs 200 Lcas , Existing Borrower → Rs 500 Lacs.
15.CMF : Rs 1 Cr and above .Upto moderate risk → bimonthly , HR → monthly
16. Fixed Asset valuation: Once in three years. 1. NR → not required 2.NR→ once
in 3 years for Rs 2 Cr and above, 3.MR & HR →Once in three years for Rs 1 Cr and
above.

MARGINAL COST OF FUND BASED LENDING RATES ( 185/2016)

Marginal Cost of Fund Based Lending Rate is introduced in place of Base Rate
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 77 | P a g e
 for loans/advances and credit facilities on renewal/reset
w.e.f.01.04.2016(185/2016)
Pricing of Credit under Base Rate system for eligible new loans/advances is
discontinued except for exempted categories. Exempted categories are
 advances to banks‘ depositors against their own deposit
 Advances to banks‘ own employees, retired employee, CEO/Whole Time
Directors.
 Fixed rate loans of tenor above three years.
 Loans linked to a market determined external benchmark
 Floating interest portion of hybrid loan shall not be exempted from MCLR
system
 WCTL,FITL and scheme specific loans formulated by GoI, wherein rate of interest is
specified
 Loans granted under refinance schemes formulated by GoI /Government
undertaking wherein banks charges interest at the rates prescribed under
the scheme to the extent refinance is available are not linked under MCLR.
Interest charged on portion not covered under refinance should adhere to
MCLR guidelines
Rate of interest on existing working capital limits on renewal on or after 01.04.2016
and other credit limits on reset of pricing will be linked to MCLR.
Actual lending rate will be by adding the components of spread to MCLR. There will be no
lending below MCLR.
ROI on exposures above Rs 2 Cr shall continue to be based on credit risk rating
( internal/external) .ROI on exposure above Rs 2 lakhs upto Rs 2 Cr to be based
on internal risk rating, except agriculture loans, retail loans and other specific
scheme
Banks, at their option specify interest reset dates on floating rate loans. Reset
date can be linked either to first disbursement or date of review of MCLR.MCLR
prevailing on the date of first disbursement, shall be applicable till next reset
date, irrespective of the changes in the benchmark during the interim. Future
reset dates shall be determined accordingly. The periodicity of reset shall be
one year or lower. The exact periodicity of reset shall form part of the terms of
the loan contract.
Existing loans and credit limits linked to the Base rate/BPLR may continue till
repayment or renewal.
Option to be extended to existing borrowers (other than fixed rate) to switch over to
interest rate linked to MCLR and the branches can permit charging the corresponding
applicable MCLR linked ROI .
Switch over to MCLR system for existing borrowers can be permitted only if all
the sanction terms and conditions are complied with and there are no
overdues. Once switch over option is exercised ,it can not be reversed. Link
letter obtained for switching over should be preserved with loan papers.
In case of existing running limits, where limits are expiring on or after
01.04.2016 including where the extension of tenability is has already been
permitted and where customer has not submitted the renewal papers, existing
rate of interest linked to base rate to continue till renewal. Further, where
extension of tenability has been permitted after 01.04.2016, such accounts
shall also be under Base Rate regime only till renewal
Where a loan has been sanctioned prior to 01.04.2016 but first disbursement
made on or after 01.04.2016, whether partial or full, applicable rate of
interest shall be as per the MCLR system.
Where multiple credit limits have been permitted under Base Rate system
before 01.04.2016 and the borrower has availed only one or two credit
facilities, the rate of interest for the other loans/limits availed after
01.04.2016 shall also carry interest linked to Base Rate.
Maximum lending rate for working capital and term loan specified
Tenor linked MCLRs w.e.f. 01.04.2016
Additional liquidity premium to be loaded to the card rates for applicable
loans/advances
Notice to be issued to the existing borrowers giving option for switch over to MCLR
linked ROI
Link letter to be obtained on switchover to MCLR system and existing interest clause in
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 78 | P a g e
 all agreements for new loans to be substituted with a revised clause.
Fixation of appropriate MCLR for various categories of loans :
 Overnight MCLR : 9.00 %
 One month MCLR: 9.25 %
 Three month MCLR: 9.35 %
 Six Month MCLR: 9.40%
 One Year MCLR: 9.45 %
Loans/Term Loans sanctioned with the maturity of one year or more shall be linked to one
year MCLR. Short Term Loan/credit facilities below one year shall be linked to respective
MCLR
MCLR shall be reset in borrowal accounts based on the original tenor and not on the residual tenor.
The tenor of the reset MCLR shall be the same as that of the initial benchmark MCLR tenor.
For existing loans under Base Rate, at the time of switchover to MCLR, fixing of MCLR
will be with reference to residual tenor.
For running limits, viz., OD/OCC/KCC, One Year MCLR will be applicable
irrespective of the tenability/ extension/short renewal permitted.
Loans with maturity of 1 year or more and Term Loans will be linked with one year
MCLR with reset period of one year.
Maximum Lending rate :
 Working capital /Short term loans : 700 bps over highest MCLR
 ECNOS: One year MCLR + 525 bps
 Clean OD/DPN : Highest MCLR+ 700 bps
Liquidity Premium : For loan repayable more than one year and upto 5 year: 0.40 % ,
and repayable more than 5 year : 0.85 %
1 % additional ROI ( even beyond maximum rate also) may be charged for unsecured
advances of Rs 1 Cr & above. CGM/GM-CO-CAC & above can waive it up to their
delegated powers
Rate of Interest on Loans/advance or credit facilities extended under MCLR
WC/STL ( upto 36 months)/TL and medium TL: upto Rs 2 Lacs : MCLR+3.70 %
ROI concession of 0.25% in CGMSE covered account is available, subject to condition
that ultimate MCLR shall not fall below MCLR
Canara Trade : MCLR+2.55%, Pragati: MCLR+0.85% + (Liquidity Premium) ,
Unnati : MCLR+1.55% (+ Liquidity premium) ,Satkar : MCLR+ 0.85%,Vahan
:MCLR+ 0.80%
MSE Smart upto Rs 50 Lacs: LR/NR → MCLR +1.55% ,MR → MCLR+1.80%,MSE Smart
above Rs 50 Lacs: LR/NR→ MCLR+1.80% ,MR→MCLR +2.05% . Add liquidity premium
in MSE smart loans.
MSE Vijeta: Model I : MCLR+0.80%,Model II: LR/NR→MCLR+1.30% , MR→
MCLR+1.55% ( 0.25% concession to be extended to CGMSE covered accounts)
MSME CAP WC : LR/NR→MCLR+1.55% ,MR→MCLR+2.30%, CAP TL :
LR/NR→MCLR+1.80%, MR →MCLR+2.30% ( 0.50 % concession to women borrower
NOT to be extended under CAP)
HL→ include Yuwa awas, NRI,HNI ,agriculturists & Senior Citizen ( Loan only upto Rs
75 Lacs ): MCLR+0.20% up to Rs 100 Lac , For loan above Rs 100 Lac : MCLR+0.30%
Education Loan :upto Rs 7.5 Lacs→MCLR+2 % , Above Rs 7.5 Lacs →MCLR+1.80%
IBA Model Education Loan scheme : MCLR + 1.50 %
Home Improvement Loan: ( MCLR+2.45 ) %
Canara Vehicle ( 2 wheeler): MCLR+3.2% ,Canara vehicle ( 4 wheeler): Men borrower
→MCLR+0.50 % ,Women borrower→MCLR+0.45%
Canara Pension: MCLR+3.20 %, Canara Pension to retired employee/family
pensioners of Bank: MCLR+1.50 % , Canara Jeevan:MCLR+1.50 %, Swarna
Loan:MCLR+3.30 % ,Canara Budget : MCLR+4.30% with salary tie up &
MCLR+5.30% without Salaries tie up. Teacher‘s Loan:MCLR+3.95%, Home
Loan Plus:Term Loan →MCLR+2.80% ,Home Loan Plus Overdraft:
MCLR+3.30%, Canara Mortgage:MCLR+3.00% ,Canara Rent for navratna
:MCLR+2.70% ,Canara Rent for general Cos :MCLR+3.00%
Agriculture Short term and Term Loan ( up to Rs 3 Lacs ) : MCLR+1.40%
Agriculture Short term and Term Loan :MCLR+ 2.30 % for loan above Rs 3 & up to Rs 1CR.
GLOD and gold loan for agriculture purpose up to Rs 2 Lacs : MCLR+0.45%. , above Rs 2 Lacs
& upto Rs 5 Lacs:MCLR+2.45%
SHG Loan upto Rs 3 Lacs : MCLR+1.30 %

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 PC up to sanctioned period (Max 270 days): MCLR+2.75%, beyond sanctioned period
and up to 360 days (from date of advance) : ECNOS , Beyond 360 days from date of
advance : ECNOS from date of advance.
Advances against receivables from Govt :MCLR+0.75% up to 90 days & beyond 90
days ECNOS
Post shipment finance : for NTP/NDD/actual due date ( As specified by FEDAI) :
MCLR+0.75%, %,beyond NTP/NDD/Actual due date & up to 180 days from date
of advance : MCLR+2.00% , From 181st day from NTP/NDD/actual date of
realization till date of realization : MCLR+3.25% , beyond date of crystallization
to date of realization :ECNOS
Advances against deposit standing in the name of borrower: Upto 90 % by
Branch in charge → ROI on Deposit +2 % , Beyond 90 % and upto 100 % for
over drawn liability :2 % above on rate of interest on advance subject to
maximum MCLR+7 %
Advances against third party deposit : Up to 75 % → ( MCLR+3) % or 3 % above the
interest paid on deposit ,whichever is higher
Loan against FCNR in FC (90%): (Deposit ROI +2) % or LIBOR/SWAP for the period of
loan on date of loan + 2 %, whichever is higher.
Loan against FCNR in INR to self ( upto 90%) : MCLR+ 0.50 %
Loan against FCNR in INR to third party ( 75 %) : MCLR+ 3 % ( Same as domestic
deposit )
Third party Deposit →Loan against NRE/NRO deposit ( 75 % ) : MCLR+3 % or 3 %
above deposit rate ,whichever is higher
Loan against RFC ( I
NR) deposit ( 90 % ) : MCLR+ 4 %
MCLRs REVISED EFFECTIVE FROM 1ST JUNE 2016 (317/2016)
1 . Overnight MCLR 9.00%
2 . One-month MCLR 9.10%
3 . Three-month MCLR 9.15%
4 . Six-month MCLR 9.20%
5 . One-year MCLR 9.35%

TEST YOURSELF: GENERAL ADVANCES

1. The tenability of overdraft facility for employees is – a) 2 years
from the date of sanction b) 1 year from the date of sanction
c) 2 years from the date of 1st availment
d) 3 years from the date of sanction e) None of the above
2. Present Bank Rate is –
a) 6.5% b) 7.00% c) 6.25% d) 6% e) None of the above
3. The present MCLR Rate of our Bank is –
a) 10% b) 8.25% c) 9.35 % d) 9.00% e) None of the above
4. Minimum amount for OD against deposit is –
a) Rs.1000/- b) Rs.5000/- c) Rs.10000/-
d) No such restriction e)None of the bove
5. Maximum amount for VSL against deposit
a) Rs.1000/- b) Rs.5000/- c) Rs.100/-d) No such restriction e) None of the above
6. VSL proceeds can be paid by cash – a) No ceiling b) Less than Rs.20000/- only c) Cannot be paid
d) Upto Rs.5000/- only e) None of the above
7. Short Term Loan -
a) Repayable in less than 12 months b) Repayable in less than 24 months c) Repayable in
less than 36 months d) Repayable in less than 48 months e) None of the above
8. Normally, inspection of stock should be carried out – a) Every month at regular intervals
b) Every quarter at regular intervals
c) Periodically at irregular intervals as per sanction d) All the above
e) None of the above
9. Penal interest for delayed submission of Stock Statement is –
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 80 | P a g e
 a) 2% b) 1% c) 3% d) 4% e) None of the above
10. Provisions for Loss Assets –
a) 25% of liability b) 100% of liability c) 110% of liability
d) 60% of liability e) None of the above
11. The system of Special Watch is introduced in respect of
a) All Non-performing Assets b) For Sub-standard and Doubtful Assets
c) All Standard Assets d) All the above e) None of the above
12. VSL can be granted against following security a) Stock of goods
b) FDR / KDR
c) SB Balance
d) All the above e) None of the above
13. The Cash Reserve Ratio is –
a) 7.5%
b) 4%
c) 6%
d) 7% e ) none of the above
14. The Statutory Liquidity Ratio is –
a) 21.25% b) 30% c) 35% d) 30% e) None of the above
15. Balance Sheet is
a) A Statement of balance in a customer’s account.
b) A Statement of financial position of a business unit as on a particular date. c) A
confirmation of balancing of books to be submitted by the branch.
d) All the above
e) None of the above
16. What is the validity period of LUCC. a) 2 year
b) 3 year c) 4 year d) 5 year e)
None of the above
17. The following is a Fixed Asset – a) Land and Building b) Stock
c) Debtors
d) Cash in hand
e) None of the above
18. The following is a Current Asset – a) Plant and Machinery b) Vehicle
c) Building d) Cash in hand e) None of the above
19. The following will give Net profit –
a) Trading Account
b) Profit Et Loss Account c) Balance Sheet
d) All the above e) None of the above
20.The following is a Term Loan – a) LHV b) OCC c) KCC
d) All the above e) None of the above
21.Which of the following are non performing assets
a. Old furniture items in the branches
b. Employees who are not working in the branches c. Standard and substandard assets d. Cash held
more than requirements ,
e. Substandard, doubtful and loss loans and advances
22.Under GCCS scheme maximum loan amount is a. Rs 10000 b. Rs 20000 c. Rs 25000 d. Rs 30000
e. none of the above – scheme withdrawn
23.MSME means
a. Maximum number of Small Micro Enterprises b. Medium Small Micro Enterprises
c. Micro Small and Medium Enterprises
d. Minimum Security of Machines and Engines e. None of the above
24.Special Watch category borrowal accounts are divided into
a. 2 categories b. 3 categori es c. 4 categori es
d. 5 categories e. None of the above
25.PMEGP means
a. Plant, Machinery, Engine and General Plot
b. Prime Minister Environment Generation Programme
c. c. Prime Minister Education Generation Programme

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 81 | P a g e
 d. Prime Minister Energy Generation Programme
e. Prime Minister Employment Generation Programme
26. Maximum loan amount under swarna loan scheme is
a. Rs.2 lakhs b. Rs 5 lakhs c. Rs.10 lakhs d. Rs.20 lakhs
e. None of the above
27.Which of the following can be accepted as primary security?
a. Stock in trade b.durable utility articles. c. Live stock, Poultry etc. d. Gold bullion e. All the
above.
28.Base Rate is fixed by: a. Individual Banks b. RBI
b. Government of India d. Credit wing e. None of the above
29.In case of Educational Loans above Rs.25,000/- and upto Rs.2 lacs, the applicable penal interest is
: a. 1% b. 1.5% c. 2% d. 2.5% e. NIL
30.Maximum Penal Interest chargeable in a Loan Account :
a. 1% b. 1.5% c. 2% d. 2.5% e. NIL
31.What is the maximum limit under Laghu Udhyami Credit card Scheme:
a. Rs. 2 lakhs b. Rs. 4 lakhs c. Rs.6 lakhs d. Rs.8 lakhs e. Rs.10 lakhs
32.For subordinate staff, the quantum of housing loan for construction /
purchase of house / flat is
a. Rs. 5 Lacs b. Rs. 12 Lacs c. Rs. 20 Lacs d. Rs. 4 Lacs e. Rs. 6 Lacs
33.AOD/Letter of Revival is to be taken
a. Every year b. After 2 years and before completion of 3 years
b. During inspection time d. After 3 years e. None of the above
34. Credit Risk Rating is compulsory for loans (other than Retail Lending), if the loan
amount is Rs. and above
a) Rs.25,000/- b) Rs.50,000/- c) Rs.1,00,000/- d) Rs.2,00,000/- e) Not Required
35. Assessment of Working Capital Requirement is done under which of the following
method/s a) Turnover Method b) MPBF Method c) Cash Budget Method
d) Any of the above as per eligibility of borrower e) None of the above
36. Duration of limits under ‘Canara Trade’ is
a) One year b) Two years c) Three years d) Four years e) None of the above
37. Number of grades in asset sub classification code system is:
a. 3 b. 4 c.7 d. 8 e. 9
38. Rate of interest on VSL against deposit is a) 1% above the deposit rate of interest b) Base rate
c) BPLR d) Deposit rate of interest e) 2% above the deposit rate of interest
39. Rate of interest on clean OD for customers is a) Base rate b) Base rate +2%
c) BPLR d) MCLR + 7 % e) None of the above
40. For priority sector loans upto 25000/- penal interest applicable is
a) 2%, b) 1% c) nil d) 1/4% e) None of the above
41. Stock statements to be submitted within ------ days from the closure of the month.
a) 2 days for small traders and 7 days for others
b) 10 days c) 7 days d) 15 days
e) 7 days for small traders and 14 days for others
42. Adhoc credit limit can be permitted for a maximum period of: a)
30 days b) 60 days c) 90 days d) 120 days e) 180 days
43. Branch shall obtain independent valuation report from empanel valuers in
case of loan account where the value of properties (LEtB) is Rs. 10 crores and above. a)
Nil b) One c) Two
d) Three
e) None of the above
44. Following is not credit monitoring tool:
a) Review of loan sanctions
b) Special watch list of accounts c) Mid term review
d) Review of stock statement
e) Pass sheet of the loan account
45. Quick Mortality accounts pertain to:
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 82 | P a g e
 a) New borrowal accounts Slipping to Non performing asset b) With liability Rs.5.00 lakh and
above
c) Within a period of 12 months
d) All the above. e) None of the above.
46. It is mandatory that no collateral security is to be insisted in respect of loans to Micro and small
enterprises accounts upto
a) Rs.5 lakhs b) Rs.10 lakhs c) Rs.25 lakhs
d) Rs. 100 lakhs e) Any of the above.
47. DPN loan to employees is to be cleared in
a) 7 years b) 5 years
c) 120 EMIs d) 15 years e) None of the above
48. Following is a Non fund based limit:
a) Open cash credit b) Letter of credit c) Bank Guarantee d) All the above e) (b) and (c)
above
49. Priority sector Loan proposals upto Rs.25000/- should be disposed of within:
a) 7 days b) 10 days c) 15 days d) 20 days e) 30 days
50. Interest /installment not serviced in a term loan account beyond days is
called a non performing asset
a) 30 days b) 60 days c) 45 days d) 120 days e) 90 days

ANSWERS
1 a 11 c 21 e 31 e 41 a
2 b 12 b 22 e 32 c 42 c
3 c 13 b 23 c 33 b 43 c
4 b 14 a 24 d 34 d 44 e
5 d 15 b 25 e 35 d 45 d
6 b 16 b 26 c 36 b 46 b
7 a 17 a 27 e 37 e 47 c
8 c 18 d 28 a 38 e 48 e
9 a 19 b 29 e 39 d 49 c
10 b 20 a 30 c 40 c 50 e

5. PRIORITY SECTOR , AGRICULTURAL ADVANCES &

GOVERNMENT SPONSORED SCHEMES
PRIORITY SECTOR
PRIORITY SECTOR LENDING
History : At a meeting of the National Credit Council held in July 1968, it was emphasised that commercial
banks should increase their involvement in the financing of priority sectors, viz., agriculture and small scale
industries. The description of the priority sectors was later formalised in 1972 on the basis of the report
submitted by an RBI's Informal Study Group. Initially no specific target were fixed but in Nov.1974, the banks
were advised to raise the share of priority sector in their aggregate advances to the level of 33 1/3 % by March
1979. Subsequently, on the basis, of the recommendations of the Working Group on the Modalities of
Implementation of Priority Sector Lending and the Twenty Point Economic Programme by Banks (Chairman: Dr.
K. S. Krishnaswamy), all commercial banks were advised to achieve the target of priority sector lending at 40
%. of aggregate bank advances by 1985. Sub-targets were also specified for lending to agriculture and the
weaker sections within the priority sector. The guidelines on Priority sector were revised in the year 2007 based
on the recommendations of the Working Group headed by Shri C. S. Murthy. The Sub-Committee headed by
Shri Y. H. Malegam constituted to study issues and concerns in the Micro Finance institutions (MFI) sector, also
recommended review of the guidelines on priority sector lending. In August 2011, RBI set up a Committee
headed by Shri M V Nair, to suggest revised guidelines with regard to Priority Sector lending classification and
related issues with effect from July 20, 2012. The priority sector loans sanctioned under the guidelines issued
prior to these guidelines will continue to be classified under priority sector till maturity / renewal. RBI revised
the priority sector lending guidelines with effect from April 23rd 2015 on the basis of recommendations of
an Internal Working Group (IWG) headed by Ms Lily Vadera. The salient features of the guidelines are as
under:-
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 83 | P a g e
(i) Categories of the priority sector: Medium Enterprises, Social Infrastructure and Renewable Energy will form
part of priority sector, in addition to the existing categories.
(ii) Agriculture: The distinction between direct and indirect agriculture is dispensed with.
(iii) Small and Marginal Farmers: A target of 8 percent of ANBC or CEOBE, whichever is higher, has been
prescribed for Small and Marginal Farmers within agriculture.
(iv) Micro Enterprises: A target of 7.5% of ANBC or CEOBE, whichever is higher, has been prescribed for Micro
Enterprises.
(v) Weaker Section: There is no change in the target of 10% of ANBC or CEOBE, whichever is higher.
(vi) Target for Foreign Banks: Foreign Banks with 20 branches and above already have priority sector targets
and sub-targets for Agriculture and Weaker Sections, which are to be achieved by March 31, 2018. Foreign
banks with less than 20 branches will move to Total Priority Sector Target of 40% of ANBC or CEOBE,
whichever is higher, on par with other banks by 2019-20.
(vii) Bank loans to food and agro processing units will form part of Agriculture.
(viii) Export credit: Export credit upto 32% of ANBC or CEOBE, whichever is higher, will be eligible as part of
priority sector for foreign banks with less than 20 branches. For other banks, the incremental export credit over
corresponding date of the preceding year will be reckoned upto 2 percent of ANBC or CEOBE, whichever is
higher.
(ix) The loan limits for housing loans and MFI loans qualifying under priority sector have been revised.
(x) The priority sector non-achievement will be assessed on quarterly average basis at the end of the
respective year from 2016-17 onwards, instead of annual basis as at present.
(xi) The revised guidelines are operational with effect from 23 April 2015.
Categories under priority sector
1. Agriculture
2. Micro, Small and Medium Enterprises
3. Export Credit
4. Education
5. Housing
6. Social Infrastructure
7. Renewable Energy
8. Others
Targets /Sub-targets for Priority sector Domestic scheduled commercial banks and Foreign
banks with 20 branches and above
Total Priority Sector: 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance
Sheet Exposure (CEOBE), whichever is higher.
Agriculture: 18% of ANBC or CEOBE, whichever is higher. Small and Marginal Farmers: Within the 18% target
for agriculture, target for Small and Marginal Farmers will be 8% of ANBC or CEOBE, whichever is higher. This
target to be achieved in a phased manner i.e., 7% by March 2016 and 8% by March 2017.
Micro Enterprises: 7.5% of ANBC or CEOBE, whichever is higher to be achieved in a phased manner i.e. 7% by
March 2016 and 7.5% by March 2017.
Advances to Weaker Sections: 10% of ANBC or CEOBE, whichever is higher.
Achievement of Targets by foreign banks: Foreign banks with 20 branches and above have to achieve the Total
Priority Sector Target, Agriculture Target, Weaker Section Target within a maximum period of five years starting
from April 1, 2013 and ending on March 31, 2018. The sub-target for Small and Marginal farmers and for Micro
enterprises would be made applicable post 2018 after a review in 2017.
Foreign banks with less than 20 branches
Total Priority Sector: 40% of ANBC or CEOBE, whichever is higher to be achieved in a phased manner by March
2012 – (32% by 2015-16, 34% by 2016-17, 36% by 2017-18, 38% by 2018-19, 40% by 2019-20. The
additional priority sector lending target of 2% of ANBC each year from 2016-17 to 2019-20 to be achieved by
lending to sectors other than exports. The sub targets, if to be made applicable post 2020, would be decided in
due course.
Computation of Adjusted Net Bank Credit (ANBC )
Bank Credit in India [Item No.VI of Form ‘A’ under Section 42 (2) of the RBI Act, 1934]. I
Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC) - For the purpose of priority sector computation only III (I-II)

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 84 | P a g e
 Bonds/debentures in Non-SLR categories under HTM category+ other investments
eligible to be treated as priority sector +Outstanding Deposits under RIDF and other
eligible funds with NABARD, NHB and SIDBI on account of priority sector shortfall + IV
outstanding PSLCs

Eligible amount for exemptions on issuance of long-term bonds for infrastructure and
affordable housing V

Eligible advances extended in India against the incremental FCNR (B)/NRE deposits,
VI
qualifying for exemption from CRR/SLR requirements.
ANBC III+IV-V-VI

For calculation of Credit Equivalent Amount of Off-Balance Sheet Exposures, banks to follow Master Circular on
Exposure Norms.
Description of the eligible categories under PS : 1. Agriculture
There will not be any distinction between direct and indirect agriculture. Lending to agriculture sector has been
redefined to include (i) Farm Credit (which will include short-term crop loans and medium/long-term credit to
farmers) (ii) Agriculture Infrastructure and (iii) Ancillary Activities.
1.1 Farm credit
A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of
individual farmers, provided banks maintain disaggregated data of such loans], directly engaged in Agriculture
and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will
include:
2. 1. Crop loans to farmers, including traditional/ nontraditional plantations and horticulture, and allied
activities. Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of
agricultural implements and machinery, loans for irrigation and other developmental activities
undertaken in the farm, and developmental loans for allied activities.)
3. Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting,
grading and transporting of their own farm produce.
4. Loans to farmers up to Rs 50 lakh against pledge/hypothecation of agricultural produce (including
warehouse receipts) for a period not exceeding 12 months.
5. Loans to distressed farmers indebted to non-institutional lenders.
6. Loans to farmers under the Kisan Credit Card Scheme.
7. Loans to small and marginal farmers for purchase of land for agricultural purposes.
B. Loans to corporate farmers, farmers' producer organizations/companies of individual farmers, partnership
firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery,
animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of Rs 2 crore per borrower.
This will include loans as per categories listed at A(i, ii, iii and iv)
1.2. Agriculture infrastructure
1. Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold
storage units/ cold storage chains designed to store agriculture produce/products, irrespective of their
location.
2. Soil conservation and watershed development.
3. Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and
vermi composting. For the above loans, an aggregate sanctioned limit of Rs 100 crore per borrower from
the banking system, will apply.
1.3.Ancillary activities
1. Loans up to Rs 5 crore to co-operative societies of farmers for disposing of the produce of members.
2. Loans for setting up of Agriclinics and Agribusiness Centres.
3. Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs 100 crore per borrower from
the banking system.
4. Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-
sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.
5. Loans sanctioned by banks to MFIs for on-lending to agriculture sector as per the conditions specified in
paragraph IX of this circular
6. Outstanding deposits under RIDF and other eligible funds with NABARD on account of priority sector
shortfall.
For computing 7% / 8% target, Small and Marginal Farmers will include the following:-
1. Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a landholding
of more than 1 hectare and upto 2 hectares are considered as Small Farmers.

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 2. Landless agricultural labourers, tenant farmers, oral lessees and share-croppers.
3. Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual Small and
Marginal farmers directly engaged in Agriculture and Allied Activities, provided banks maintain
disaggregated data of such loans.
4. Loans to farmers' producer companies of individual farmers, and co-operatives of farmers directly engaged
in Agriculture and Allied Activities, where the membership of Small and Marginal Farmers is not less than 75
per cent by number and whose land-holding share is also not less than 75 per cent of the total landholding.
2. Micro, Small and Medium Enterprises (MSMEs)
2.1. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as
notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006 are as
under:-

Investment Criteria for MSME

Enterprises engaged in Micro Small Medium

Manufacturing, production, Up to > 25 lac > 5 cr

preservation or Rs.25 lac up to up to
processing (Investment in Plant Rs.5 cr Rs.10 cr
& Machinery)
.
Rendering services Up to > 10 lac > 2 cr
(investment in equipment Rs.10 lac - up to up to
excluding Land & building, Rs.2 cr Rs.5 cr
fixture and furniture etc.)

Eligibility of enterprises for PS classification:

Manufacturing Enterprises: Bank loan to Micro, Small and Medium Enterprises irrespective of amount of loan.
Service Enterprises: Bank loans up to Rs 5 crore per unit to Micro and Small Enterprises and Rs 10 crore to
Medium Enterprises engaged in providing or rendering of services.
Khadi and Village Industries Sector (KVI): All loans to units in the KVI sector will be eligible for classification as
Micro enterprise under the sub-target of 7 percent /7.5 percent prescribed for Micro Enterprises under priority
sector.
Other Finance to MSMEs
1. Loans to entities involved in assisting the decentralized sector in the supply of inputs to and marketing of
outputs of artisans, village and cottage industries.
2. Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries.
3. Loans sanctioned by banks to MFIs for on-lending to MSME sector
4. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card,
Swarojgar Credit Card, and Weaver’s Card etc. catering to the non-farm entrepreneurial credit needs of
individuals).
5. Outstanding deposits with SIDBI on account of priority sector shortfall.
Sub categorization of Micro enterprises: The earlier sub-categorization within the definition of micro enterprises
(i.e. investment up to Rs 10 lac in plant and machinery and up to Rs 4 lakh in equipment) has been dispensed
with.
Continuation of MSME status: The MSME units will continue to enjoy the priority sector lending status up to
three years after they grow out of the MSME category concerned.
3. Export Credit
Domestic banks: Incremental export credit over corresponding date of the preceding year, up to 2% of ANBC
or CEOBE, whichever is higher, effective from April 1, 2015 subject to a sanctioned limit of ₹25 crore per
borrower to units having turnover of up to ₹100 crore. For foreign banks with 20 or more branches in India, this
will be effective from April 1, 2017.
Foreign banks with less than 20 branches: Export credit will be allowed up to 32 percent of ANBC or CEOBE,
whichever is higher.
4. Education
Loans to individuals for educational purposes including vocational courses upto Rs 10 lakh irrespective of the
sanctioned amount will be considered as eligible for priority sector. Now even for education abroad loans up to
Rs 10 lakh will be eligible for coverage under priority sector.
5. Housing
1. Loan for purchase/construction of a dwelling unit per family: up to Rs 28 lakh in metropolitan centres (with
population of ten lakh and above) and loans up to Rs 20 lakh in other centres provided the overall cost of
the dwelling unit in the metropolitan centre and at other centres should not exceed Rs 35 lakh and Rs 25
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 86 | P a g e
 lakh respectively. The housing loans to banks’ own employees will be excluded. Housing loans backed by
long term bonds which are exempt from ANBC should either be included as loans to individuals up to Rs 28
lakh in metropolitan centres and Rs 20 lakh in other centres under priority sector or take benefit of
exemption from ANBC, but not both.
2. Loans for repairs to damaged dwelling units: up to Rs 5 lakh in metropolitan centres and up to Rs 2 lakh in
other centres.
3. Bank loans to any governmental agency for construction of dwelling units or for slum clearance and
rehabilitation of slum dwellers subject to a ceiling of Rs 10 lakh per dwelling unit.
4. Housing projects for EWS or LIG: Loans for housing projects exclusively for the purpose of construction of
houses for economically weaker sections and low income groups, the total cost of which does not exceed Rs
10 lakh per dwelling unit. For the purpose of identifying the economically weaker sections and low income
groups, the family income limit of Rs 2 lakh per annum, irrespective of the location, is prescribed.
Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for
the purpose of purchase/construction/reconstruction of individual dwelling units or for slum clearance and
rehabilitation of slum dwellers, subject to an aggregate loan limit of Rs 10 lakh per borrower. The eligibility
under priority sector loans to HFCs is restricted to 5% of the individual bank’s total priority sector lending.
The maturity of bank loans should be co-terminus with average maturity of loans extended by HFCs.
5. Outstanding deposits with NHB on account of priority sector shortfall.
6. Social infrastructure
Bank loans up to a limit of Rs 5 crore per borrower for building social infrastructure for activities namely schools,
health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.
7. Renewable Energy
Bank loans up to a limit of Rs 15 crore to borrowers for purposes like solar based power generators, biomass
based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities
viz. street lighting systems, and remote village electrification. For individual households, the loan limit will be Rs
10 lakh per borrower.
8. Others
1. Loans not exceeding Rs 50,000/- per borrower provided directly by banks to individuals and their SHG/JLG,
provided the individual borrower’s household annual income in rural areas does not exceed Rs 100,000/-
and for non-rural areas it does not exceed Rs 1,60,000/-.
2. Loans to distressed persons [other than farmers) not exceeding Rs 100,000/- per borrower to prepay their
debt to non-institutional lenders.
3. Overdrafts extended by banks upto Rs 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts
provided the borrowers household annual income does not exceed Rs 100,000/- for rural areas and Rs
1,60,000/- for non-rural areas.
4. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific
purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these
organisations.
IV. Weaker Sections
1. Small and Marginal Farmers
2. Artisans, village and cottage industries where individual credit limits do not exceed Rs 1 lakh
3. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods Mission (NRLM),
National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual
Scavengers (SRMS)
4. Scheduled Castes and Scheduled Tribes
5. Beneficiaries of Differential Rate of Interest (DRI) scheme
6. Self Help Groups
7. Distressed farmers indebted to non-institutional lenders
8. Distressed persons other than farmers, with loan amount not exceeding Rs 1 lakh per borrower to prepay
their debt to non-institutional lenders
9. Individual women beneficiaries up to Rs 1 lakh per borrower
10. Persons with disabilities
11. Overdrafts upto Rs 5,000/- under Pradhan Mantri JanDhanYojana (PMJDY) accounts, provided the
borrowers’ household annual income does not exceed Rs 100,000/- for rural areas and Rs 1,60,000/- for
non-rural areas
12. Minority communities as may be notified by Government of India from time to time
Investments eligible for classification as PS
1. Investments by banks in securitised assets: (i) Investments by banks in securitised assets, representing
loans to various categories of priority sector, except 'others' category, provided (a) the securitised assets are
originated by banks and financial institutions and are eligible to be classified as priority sector advances prior to
securitization; (b) the all inclusive interest charged to the ultimate borrower by the originating entity should not
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 87 | P a g e
exceed the Base Rate of the investing bank plus 8% p.a. (ii) Investments by banks in securitised assets
originated by NBFCs, where the underlying assets are loans against gold jewellery, are not eligible for priority
sector status.
2. Transfer of Assets through Direct Assignment /Outright purchases:
(i) Assignments/Outright purchases of pool of assets by banks representing loans under various categories
of priority sector, except the 'others' category, provided: (a) the assets are originated by banks and financial
institutions which are eligible to be classified as priority sector advances; (b) the eligible loan assets so
purchased should not be disposed of other than by way of repayment; (c) the all inclusive interest charged to
the ultimate borrower by the originating entity should not exceed the Base Rate of the purchasing bank plus
8% p.a.
(ii) When the banks undertake outright purchase of loan assets from banks/ financial institutions to be
classified under priority sector, they must report the nominal amount actually disbursed to end priority sector
borrowers and not the premium embedded amount paid to the sellers.
(iii) Purchase/ assignment/investment transactions undertaken by banks with NBFCs, where the underlying
assets are loans against gold jewellery, are not eligible for priority sector status.
3. Inter Bank Participation Certificates: (IBPCs) bought by banks, on a risk sharing basis,
4. Priority Sector Lending Certificates: The outstanding priority sector lending certificates bought by the banks.
Monitoring of Priority Sector Lending targets
To ensure continuous flow of credit to priority sector, the monitoring will be on ‘quarterly’ basis instead of
annual basis. The data on priority sector advances have to be furnished by banks at quarterly and annual
intervals.
Non-achievement of Priority Sector targets
Scheduled Commercial Banks having any shortfall in lending to priority sector shall be allocated amounts for
contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD and other Funds
with NABARD/NHB/SIDBI, as decided by RBI from time to time. For the year 2015-16, the shortfall in
achieving priority sector target/sub-targets will be assessed based on the position as on March 31, 2016.
From financial year 2016-17 onwards, the achievement will be arrived at the end of financial year based on
the average of priority sector target /sub-target achievement as at the end of each quarter. The interest
rates on banks’ contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by RBI. The
misclassifications reported by the Reserve Bank’s Department of Banking Supervision would be adjusted/
reduced from the achievement of that year, to which the amount of declassification/ misclassification
pertains, for allocation to various funds in subsequent years. Non-achievement of priority sector targets and
sub-targets will be taken into account while granting regulatory clearances/approvals for various purposes
Common guidelines for priority sector loans
1. Loans up to Rs 25,000 in PS there is no margin, no collateral security, no penal interest on
advance, no processing fees and no inspection charge.
2. Loan more than Rs 25,000, the margin will be from 15% to 25%. For Loans beyond Rs
25,000, bank can ask for TPG/collateral security or both.
3. Loan application disposal norms : As decided by Bank's Board of Directors
4. COLLATERAL SECURITY :
For agriculture: NIL In case of: Up to Rs.100000.
Up to Rs.3 lac in case of recovery tie-up

Other priority sector Up to Rs.25000 nil

Micro & Small Enterprises: Not to be insisted upon: Up to Rs.10 lac
-normal accounts -good track record a/c -accounts Up to Rs.25 lac
guaranteed under CGF guarantee up to Rs.100 lac Up to Rs.5 lac — nil

Agro clinics & business centres

SGSY:
-Individual up to Rs.100000 Not to be obtained up to this amount
-Group up to Rs. 10 lac

SISRY Not to be obtained

Education loan up to Rs.7.50 lac Not to be obtained up to this amount.

1. Rate of interest: As per directives issued by RBI.

2. Service charges: No loan related and adhoc service charges/inspection charges on priority sector

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 88 | P a g e
loans up to Rs 25,000.
3. Receipt, Sanction/Rejection/Disbursement Register: A register/ electronic record should be
maintained by the bank, wherein the date of receipt,
sanction/rejection/disbursement with reasons thereof, etc., should be recorded.
4. Issue of Acknowledgement of Loan Applications: Banks should provide acknowledgement for loan
applications received under priority sector loans. Bank Boards should prescribe a time limit within
which the bank communicates its decision in writing to the applicants.
Bank loans to MFIs for on-lending
(a) Bank credit to MFIs extended for on-lending to individuals and also to members of SHGs / JLGs
will be eligible for categorisation as priority sector advance under respective categories viz.,
Agriculture, Micro, Small and Medium Enterprises, and 'Others', as indirect finance, provided not less
than 85% of total assets of MFI (other than cash, balances with banks and financial institutions,
government securities and money market instruments) are in the nature of “qualifying assets”.
Aggregate amount of loan, extended for income generating activity, should be not less than 50% of
the total loans given by MFIs.
(b) A “qualifying asset” shall mean a loan disbursed by MFI, which satisfies the following criteria:
(i) The loan is to be extended to a borrower whose household annual income in rural areas does not
exceed Rs 1,00,000/- while for non-rural areas it should not exceed Rs 1,60,000/-.
(ii) Loan does not exceed Rs 60,000/- in the first cycle and Rs 100,000/- in the subsequent cycles.
(iii) Total indebtedness of the borrower does not exceed Rs 1,00,000/-.
(iv) Tenure of loan is not less than 24 months when loan amount exceeds Rs 15,000/- with right to
borrower of prepayment without penalty.
(v) The loan is without collateral.
(vi) Loan is repayable by weekly, fortnightly or monthly installments at the choice of the borrower. (c)
Caps on margin and interest rate
(i) Margin cap: The margin cap should not exceed 10% for MFIs having loan portfolio exceeding Rs
100 crore and 12% for others. The interest cost is to be calculated on average fortnightly balances of
outstanding borrowings and interest income is to be calculated on average fortnightly balances of
outstanding loan portfolio of qualifying assets.
(ii) Interest cap on individual loans: Interest rate on individual loans will be the average Base Rate of
five largest commercial banks by assets multiplied by 2.75% or cost of funds plus margin cap,
whichever is less. The average of the Base Rate shall be advised by Reserve Bank of India.
(iii) Components are to be included in pricing of loans viz., (a) a processing fee not exceeding 1% of
the gross loan amount, (b) interest charge and (c) the insurance premium.
The processing fee is not to be included in the margin cap or the interest cap. Only the actual cost
of insurance i.e. actual cost of group insurance for life, health and livestock for borrower and
spouse can be recovered; administrative charges may be recovered as per IRDA guidelines. There
should not be any penalty for delayed payment. No Security Deposit/ Margin are to be taken.
PROCESSING/INSPECTION FEE, SERVICE CHARGE, PENAL INIT IN PRIORITY SECTOR
ADVANCES
1.For loans up to Rs.25000 No charges
2.For loans above Rs.25000 Bank discretion
AGRICULTURAL ADVANCES
1. No Margin and No Collateral security for agricultural advances up to Rs 100,000
2. No no dues certificate for loans up to Rs 50,000.
3. Committee on flow of credit to agriculture was headed by: Prof Vyas
4. Crops divided into short duration and long duration. Short duration crop where crop season
upto: 12 months. Long Duration crop where crop season more than 12 months. 5_ The
decision regarding duration of crop by SLBC_
6. Service Area approach discontinued except for Government sponsored schemes.
7. Rashtriya Krishi Birna Yojna (RKBY) is operated by : Agri Insurance company Limited.
8. Risks covered by RKBY: damage to crops by natural calamities like flood, draught, pest attack etc
9. Risks not covered under RKBY : War and Nuclear risk
10. Members of Joint Liability Group can be: 4 to 10
11. Maximum advance to Joint Liability Group: Rs 50,000 per member and Rs 5 lac for the group.
12. The scale of finance per acre for crop loans is to be decided by District Technical Committee.
13. If crop is damaged, crop loan has to be converted to medium term loan repayable in 3 to 5 years.
14. Annewari refers to damage to crop due to natural calamities like draught, flood, hailstorm etc.
There are mainly two types of crops Le. Rabi and Khalif. Rabi is generally sown in Oct/Nov and harvested in
April and Kharif is generally sown in July and harvested in Sept/Oct. Main Rabi crops are wheat and gram and
main Kharif crops are paddy, jwar, bajra.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 89 | P a g e
Various types of cultures and revolutions :
1. Sericulture: Silk production. 2. Apiculture: Honey Bee keeping
3. Aquaculture: Shrimp farming, fishes 4. Pisciculture: Breeding of fishes in pond
5. Floriculture: Flower production 6. Apriculture: Mushroom production
7. Silviculture: Forestry 8. Horticulture: Fruits production
9. White revolution: milk production 10_ Green revolution: increase in foodgrain production
11. Blue revolution: fish production 12_ Yellow revolution: increase in oilseeds and pulses
13. Olericulture : Vegetable Cultivation 14. Tissue culture: Improvement of plant varieties
15. Vermiculture - Rearing of earth worm 16. Mulberry Associated with -
Sericulture 17. Rainbow revolution- connected with flowers

Interest Subvention for Agricultural Loans

1. Available for short term production loans in agriculture up to : Rs 3 lakh
2. Available only to public sector banks
3. Subvention provided by Central Govt
4. Rate of subvention: 2% p.a.
5. Interest charged by banks: 7% per annum.
6. Submission of claims: Half-yearly as at September 30, and March 31,
7. Additional subvention for prompt repayment: 3% if repayment within one year.
8. Effective rate to farmer: 4%
Kisan Credit Card
1. Scheme prepared by Nabard and changes also by Nabard.
2. Revised on recommendations of Committee headed by Shri T.M.Bhasin.
3. Kisan Credit Card Scheme can be used for (a) meeting the short term credit requirements for
cultivation of crops (b) Post harvest expenses (c) Produce Marketing loan (d) Consumption
requirements of farmer household (e) Working capital for maintenance of farm assets and
activities allied to agriculture, like dairy animals, inland fishery etc. (f) Investment credit
requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc
4. Fixation of limits: The short credit limit for farmers other than marginal farmers for first
year will be calculated as under - Scale of finance for the crop (as decided by District Level
Technical Committee) x Extent of area cultivated + 10% of limit towards post-harvest /
household / consumption requirements + 20% of limit towards repairs and maintenance
expenses of farm assets + crop insurance, PAIS & asset insurance_ For subsequent years,
limit will be increased each year by 10% towards cost escalation increase in scale of finance
for every successive year and estimated Term loan component for the tenure of Kisan Credit
Card, i.e., five years
5. Validity Period of KCC: Banks may determine the validity period of KCC and its periodic review.
6. If there is a credit balance in the account it will earn interest at Saving Fund rate as per rules
applicable in SF account.
7. Personal Accident Insurance for KCC holders: KCC holders are covered against death or
permanent disability due to accident for Rs 50,000. For partial disability due to accident the
cover is available for Rs 25,000. The cover is available only to KCC holders up to 70 years of
age at the time of entry to the Scheme. The insurance premium is competitive but not more
than Rs 15 per annum to be shared by the bank and the borrower in the ratio of 2:1.

Farmers' Club Programme (FCP)

1. Features of the Club:
 Size of the Club:No restriction on the upper limit but the minimum size should be 10 members
Membership: Both farmers as well as non farmers can become the members of the club.
 Office bearers: Each Club will have two office bearers, viz, Chief Co-ordinator and
Associate Coordinator.
 Operational area: Preferably one village or a group of 2-3 villages on contiguous basis.
 Registration: Not required.
 Bank Linkage: All the Clubs should have savings bank accounts with the bank in the joint
name of the office bearers.
2. NABARD assistance: Rs.10000/- per club per annum for a period of three years as per
following details: Formation and maintenance expenses:Rs.2000; Awareness / orientation
meet at base level:Rs.5000; Meet with experts programme (2 programmes in a year) :
Rs.3000
3. Assistance exceeding Rs.10,000/- may be met by the bank with maximum of Rs 50001- per
annum during the first three years and

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 90 | P a g e
 Rs.10000/- per year during 4th & 5th year of formation of the club.

AGRI CLINIC & AGRI BUSINESS CENTRE

1. Eligibility: (i) The applicant should be Agricultural Graduates/Graduates in subjects allied to
agriculture. (ii)Diploma in agriculture and allied subjects from State Agricultural Universities.
(iii)Science graduates with post graduation in agriculture and allied subjects (iv) Individuals or in
group of not exceeding 5 persons; of which one could be a Management Graduate with
qualification or experience in business development and management.
2. Maximum Project cost: (a) Project by individual: Rs 20 lakh; (b) Project by a Group: Rs 100 lakh.
Margin: (a) Upto Rs 5 Lakh: Nil; (b) Above Rs 5 lakh: 25%.
4. Security: (i)Upto Rs. 5 Lakh: No collateral security (ii) Above Rs.5 Lakh: Hypothecation of
assets created out of bank loan and Collateral security or Third Party Guarantee.
5. NABARD Refinance: 100 per cent of bank loan.
6. Automatic Refinance Scheme of NABARD: Maximum loan - Rs.30 lakh, and the ceiling for refinance
would be Rs.20 lakh. Projects with outlay over Rs 30 lakh require NABARD approval.
7. Depending on the type of venture, the loan can be repaid within 5-10 years (with moratorium
upto 2 years), in easy installment.
8. Credit linked capital subsidy by Govt of India: (a) 36% of the capital cost of the project. It would be
44% for SC, ST, Women and other disadvantaged sections and those from North-Eastern and Hilly
States. Lock in period for subsidy is 3 years
Self Help Groups
1. Objectives: Self Help Group is a homogeneous group of persons below poverty line who have joined for
savings, mutual help, developing management skills and not for speculative profit and raising finance is
not main objective.
2. SHGs may be an informal group or registered under Societies Act, State Co-operative Act or
a partnership firm.
3. Number of members: 10 to 20; Difficult areas like deserts, hills: 5 to 20
4. Maximum percentage of above poverty line: 30% but they are not eligible for subsidy
Joint Liability Group
1. Number of members: 4 to 10
2. Max finance per member - Rs 50,000; Max finance per Group - Rs 5,00,000
3. Main objective: raising credit from bank
MINORITY COMMUNITIES
1. Sikhs, Muslims, Christians, Zoroastrians , Buddhists and Jains ( Jan. 2014 ) are part of
Minority community.
2. Margin money scheme of National Minorities Development and Finance Corporation: Loan by
bank: 60% of the project cost. Balance 40% shared by Minorities Corporation, state
channeling agency and the beneficiary in the ratio of 25%, 10% and 5% respectively.
3. As per Govt and RBI guidelines, credit flow to minorities to be monitored in 121 districts
having minimum 25% minority population
Laghu Udyami Credit Card (LUCC)
1. Eligibility: Existing customers with a satisfactory track record (standard account for 3 years)
2. Maximum amount:' Working capital limits up to Rs 10 lac.
3. For whom: For small business, retail trade, Small manufacturing enterprise, professional/ self
employed
4. Amount of Limit Artisans, businessmen, traders and small entrepreneurs: 20% of the annual
turnover declared for tax purposes; professional and self employed: 50% of the gross annual
fees received. Validity of the Card: 3 years subject to annual review.
Targets for finance to Micro Enterprise & T K A Nair Committee Recommendations
1. Minimum 60% of advance to micro and small enterprises should be made to micro enterprises.
2. Minimum 40% of advance to micro and small enterprises should be made to units with
investment in Plant and Machinery up to Rs 10 lac and in equipments up to Rs 4 lac.
3. Minimum 20% of advance to micro and small enterprises should be made to units with
investment in plant and machinery more than Rs 10 lac up to Rs 25 lac and in equipments
more than Rs 4 lac up to Rs 10 lac.
4. Task Force on Micro, Small and Medium Enterprises (MSMEs) was headed by: Shri T K A Nair.
5. Yearly Growth in credit to MSE should be: 20%
6. Annual growth in number of micro enterprise accounts: 10%
7. The allocation of 60% of the MSE advances to the micro enterprises is to be achieved in stages
viz. 50% in the year 2010-11, 55% in the year 2011-12 and 60% in the year 2012-13.
8. Cluster approach should be adopted for financing MSE

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 91 | P a g e
CREDIT GUARANTEE FUND TRUST FOR MICRO & SMALL ENTERPRISES (CGTMSE)
The Fund has been established by Central government and SIDBI on the recommendations of S L
Kapoor Committee. The scheme run by the trust is known as 'Credit Guarantee Fund Scheme for
Micro and Small Enterprises.Credit Guarantee Fund Trust for Micro & Small Enterprises was set up
by Govt. of India and SIDBI in August 2000 to make collateral free credit facilities, available to
MSEs.
Eligible institutions: All scheduled commercial banks and specified RRBs, NS1C, NEDFI, SIDBI
(called Member Lending Institutions (MLIs). Eligible borrowers: New & existing MSE units as per
MSME Dev Act 2006 (except Retail Trade) OR in IT and software industry services or credit facilities
to select activities under Agri-Clinics and Agri-Business Centres Rehabilitation cases : For the unit
covered under CGTSI and becoming sick due to factors beyond the control of management,
assistance for rehabilitation extended by the lender could also be covered within the overall cap of
Rs.100 lac.
Extent of guarantee cover: wef Dec 08 2008):
Women enterprises & North Eastern States
Loan up to Rs.5 lac : 85%* 4.25
Loan up to Rs.50 lac: 80%* 40.00
Loan above Rs.50 lac to Rs.100 lac: 50%* 25.00
Total amount restricted to 50.00
Micro Enterprises
Loan up to Rs.5 lac : 85%* 4.25
Loan up to Rs.50 lac: 75%* 37.50
Loan above Rs.50 lac to Rs.100 lac : 50%* 25.00
Total amount restricted to 50.00
Other loans
Loan up to Rs.50 lac : 75%* 37.50

Loan above Rs.50 lac to Rs.100 lac: 50%* 25.00

Total amount restricted to 50.00
*as %age of principal outstanding on date of NPA or on date of filing the claim, whichever is lower.
Exclusion from risk cover :Other charges such as penal interest, commitment charge, service charge,
or any other levies/ expenses shall not quay for the guarantee cover.
Conditions for Guarantee Cover
Credit facilities extended by more than one bank and/or financial institution jointly and/or separately
to eligible borrower upto a maximum of Rs.100 lakh per borrower subject to ceiling amount of
individual ML1.
Amount of loans : Rs. 100 lac including fund and non-fund based limits (for RRBs and select financial
institutions, the amount is Rs.50 lac). Collateral security: The
credit facility has to be given without collateral and/or third party guarantee. Loans against guarantee
of Govt. or DICGC, not eligible.
Time limit for obtaining guarantee cover: Within the quarter, next to the quarter, during which the
credit facilities are sanctioned.

Composite Fee as % of Women, NE Others

sanctioned loan w.e.f. 1.1.13 States, MSEs

For loan up to Rs.5 lac 0.75% p.a. 1% p.a.

Above Rs.5 lac up to Rs.100 lac 0.85% p.a. 1% p.a.

If fee is not paid on time, CGTMSE may allow payment interest at bank rate + 4%
W.e.f. 1.10.15, for loans above Rs.5 lac, the guarantee fee shall be above Standard Rate +1% if
NPA level of bank is above 20%, SR + 0.5% for NPA level of 15% to 20%, SR + 0.25% for NPA level
12% to 15%, SR for NPA level 12% and below. If bank obtained cover at least for 5 complete years, the
fee will be SR minus 0.25% for NPA level below 6%.
NPA level shall be calculated as a % of guarantees issued on and up to 31't Mar, every year
Invocation of guarantee
If (a) account has been classified as NPA as per RBI guidelines (b) suit has been filed and (c)

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 92 | P a g e
guarantee (a) within 2 years from date of NPA NPA is after lock in period or (b) within 2 yeilr from
date of completion of 18 month lock period. (lock-in period of 18 months from tIL: date of last
disbursement of the loan or the date of payment of the guarantee fee whichever is later) Payment of
the claim amount : The trust shall pay 75 % of the guaranteed amount on preferrin, of eligible claim
by the lending institution, within 30 days. For delay beyond 30 days, trust shall interest on the eligible
claim amount at the prevailing bank rate. The balance 25 % will be paid on conclusion of recovery
proceedings 'b:,; the lending institution or within 3 years from date of decree, whichever is earlier.
Sharing of recovery: Recovery shall be first appropriated towards cost of recovery, balance amount
for recovery of fee and other charges of CGTMSE and balance amount on prorate basi1/4 i.e. 85:15,
80:20, or 75:25.
Delay in sharing recovery : Every amount recovered and due to be paid to the trust shall be paid
without delay, and if any amount due to the trust remains unpaid beyond a period of 30 days from
the date on which it was first recovered, interest shall be payable to the trust by the lending
institution at the rate which is 4% above bank rate for the period for which payment remains
outstanding after the expiry of the said period of 30 days.
Misc. aspects
Promoters' Personal guarantee can be obtained. Commencement of guarantee cover : The guarantee
cover will commence from the date of payment of guarantee fee by the lender. Date of payment will
be the date on which the fee is credited to the Trust's A/c.
DRI for MSEs with guarantee cover of CGTMSE As per RBI guidelines dated Apr 15, 2014,
banks can provide differential interest rate for MSE borrowers, having guarantee cover from CGTMSE.
But such rate of interest should not be below the Base Rate.
National Equity Fund of SIDBI
1. It is a soft loan window of SIDBI to provide margin money assistance to Small Manufacturing
enterprises.
2. Maximum project cost: Rs 50 lakh.
3. Margin money assistance: 25% of the project cost with a maximum of Rs 10 lakh.
4. Promoter's contribution: minimum 10% of the project cost and Debt equity ratio should be 2:1.
5. Repayment period: 7 years including moratorium of 3 years.
Differential Rate of Interest Scheme (DRI)
1. Family in-come of borrower should not exceed Rs. 24,000/- p.a. in Metro/urban/semi-urban areas
and Rs. 18,000/- p.a. in rural areas.
2. For Rousing, loan can be granted up to Rs 20,000 to SC/ST
3. Other than housing loan to SC/ST, maximum loan amount is Rs. 15,000/- Besides production credit,
loan can be sanctioned to physically handicapped for purchase of artificial limbs, hearing aids, wheel-
chair etc to the extent of Rs 5000.
4. Rate of interest is only 4% p.a. simple
5. Maximum repayment period is 5 years including initial moratorium of 2 years
Education Loan Scheme
1. Maximum loan: Rs.10 lakh for studies in India and Rs 20 lakh for studies abroad
2. Margin: Upto Rs.4 lakh: No margin; More than 4 lakh: Studies in India: 5%; Studies abroad: 15%
3. Security: Upto Rs.4 lakh: Co obligation of parent; No security or Third party Guarantee. Loan more than
Rs 4 latch but up to Rs 7.5 lakh: Co obligation of parent and third party guarantee. Loan above Rs.7.5
lakh: Co
obligation of parent and collateral security of suitable value and/or third party along with the assignment
of future income of the student for payment of instalments.
4. Rate of Interest: Linked to base rate. Simple interest during moratorium period.
5. Repayments: Moratorium: Course period + 1 year ( 2 year as economic slowdown) from completion of
studies or 6 months after getting job, whichever is earlier. The loan to be repaid in 10 to 15 years after
commencement of repayment. The accrued interest during the repayment holiday period should be
added to the principal and repayment in EMI fixed.
6. Interest subvention provided by Govt for entire interest charged during moratorium period if
annual income of parents up to Rs 450,000.
IBA MODEL LOAN SCHEME FOR VOCATIONAL EDUCATION AND TRAINING
1. Quantum of Finance: Need based with a maximum of: (a) For courses of duration upto 3 months:
Rs 20,000; (b) For courses of duration 3 to 6 months: Rs 50,000 (c) For courses of duration 6
months to 1 year. Rs 75,000; (d) For courses of duration above 1 year: Rs 1,50,000. Margin: Nil
2. Repayment Period: Moratorium period plus (a) Courses upto 1 year: 2 to 5 years (b) above 1 year
3 to 7 years.
3. Moratorium Period: For courses of duration upto 1 year: 6 months from the completion of the

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 93 | P a g e
 course. For courses of duration above 1 year: 12 months from the completion of the course

MICRO SMALL & MEDIUM ENTREPRISES

Target
 7.5 % of ANBC% target for Micro Enterprises (Include KVIC), by March 2017. ( 7 % by
March 2016 ) .
 Loan to service enterprises will be classified as priority sector, if loan amount is
upto Rs 5 crore per unit for MSE and upto Rs 10 Crore is financed to Medium
enterprises.
 MSME will enjoy priority sector classification upto 3 years after they grow out of MSME
category

Time Norms
 Loans upto Rs 25,000 within 2 weeks from the date of receipt.
 Loans upto Rs 5.00 lakhs within 4 weeks from the date of receipt.
 Loans over Rs 5.00 lakhs upto `25 lakhs- Br-30 days, CO-45 days, HO-45 days
Loans above Rs 25 lakhs- Br-30 days, CO-45 days, HO- within a maximum period of 8 weeks from
the date of receipt.
Security Norms
 No collateral security and/or third party guarantee to be taken in respect of
loans / advances to MSME units as under (including KVIC and Government
sponsored): (a) Up to `10 lakhs
 Up to `25 lakhs in respect of units whose track record and financial
position are good as per Bank records.
 Up to `100 lakhs in respect of Micro & Small Enterprises whose borrowal
accounts are covered under CGMSE
 Presently CGMSE cover is not available for credit facilities extended to Retail Traders,

Educational Institutions, Training Institutes, Training cum incubator centres and

loans/advances granted to Medium Enterprises, JLG & SHG.
MSME Products
1. Canara MSME CAP
Minimum quantum of loan is Rs 10 Lacs .Maximum quantum for manufacturing unit is Rs 500 Lacs
and Service unit is Rs 200 Lacs .Maximum Term Loan (90 % of project cost) under the scheme is Rs
200 Lacs .Term loan alone cannot be sanctioned . Margin for TL, WC and NFB is 10 %, Repayment
period for Term Loan is 5-10 Years and tenability for working capital is one year
 Value of property in urban and metro areas for manufacturing unit should be
100 % and for service unit 125 % of loan
 Value of property in semi urban areas for manufacturing unit should be 125 %
and for service unit 150 % of loan
 Property of unencumbered residential house /flat / commercial property
/Industrial property situated in metro and urban centres
 It is mandatory to get 2 valuation even though the value of property is less than 10 Cr.
Fresh valuation to be obtained from penal valuer in every three years.
Not eligible for GCMSE cover .
2. MSE Saral ( Now Closed : cir 180/2016)
To meet business related needs including purchase of shops ,construction of business premises
,machinery ,equipments, vehicles and working capital requirements
 Only individual’s non farm entrepreneurs are eligible under the scheme upto Rs 5 Lacs
finance:
 Repayment period of Term loan can be maximum 5 Years with 2-3
months repayment holiday and tenability for working capital limit is 3 years.
 Margin for loan above Rs 25000 is 25 % ( 30 % if BD is prime security )
 Submission of stock statement in NF 585 / BD statement is once in quarter and
stock inspection is once in quarter.
 Fixed asset created out of Term Loan should be inspected at least once in a six months.

3. MSME Vahan

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 94 | P a g e
  Maximum Rs 25 lacs (above Rs 25 lacs by circle head) can be financed to
purchase new & passenger vehicle (not for taxi purpose) only under the scheme
 Retail traders can be financed under the scheme
 Margin is 10 % and ROI is BR + 0.50 %. Disbursement directly to vendor through RTGS/
NEFT
 Quantum is calculated on the basis of average of last 3 years of net profit .Ans : 3 years
 AGF of CGMSE for loans upto Rs 10 Lacs is borne by Bank and further interest concession
 For loans above Rs 10 Lacs, it is at the option of borrower to take cover under
CGTMSE, else collateral security to the extent of 100 % of the loan amount to be
taken.
 Repayment period for 4-wheeler and 2-wheeler are 84 months and 60 months respectively.
 Upfront fee under the scheme is 0.25 % of loan amount.

4. Canara Carvan
 Both goods and passenger vehicles can be financed to existing Transport
operators having 3 years of experience through term loan only
 Requirement of minimum 5 vehicles or minimum loan amount of Rs 25
Lakhs permitted under the scheme. Maximum Rs 5 crore can be financed
 Repayment period under the scheme is 60 months
 No takeover and only new vehicle can be financed
 If CGTMSE cover is not available, minimum 25 % of collateral security by way
of land and building is to be obtained.
 Interest concession depends upon scoring model. Interest concession 1 % is
available in case of score above 75 % , 0.50 % concession is available in case of
score between 50 -75 % .
 0.25 % Upfront fee concession is available in case of score above 75 %.
5. MSE Vijeta ( Now Closed : cir 180/2016)
MSE Vijeta scheme is to grant loan upto Rs 200 Lacs to women entrepreneur under MSE Sector.
Margin under model I (upto Rs 10 lacs ) is 15 %model II ( 10-200 Lacs ) is 20 %
 Under model I , CGTMSE premium is to be borne by Bank and under model
II , if borrower wishes to offer collateral security ( by way of EMT of property
) in lieu of CGTMSE coverage , the value of such collateral security should
not be less than 60 % of loan amount .
 Tenability of working capital is 2 year and and repayment period of Term Loan
under MSE Vijeta is 84 months
 ROI under model I is BR +0.5 % and for LR/NR account s under model II is BR
+1.00 % and MR rated accounts under model II is BR +1.25 %.
 No Inspection charges
 Retail trade can be financed under the scheme.
 Processing Charges under Model I are 50 % of normal Charges for loans
above Rs 5 Lacs and under Model II are 75 % of normal charges

6. MSE Smart
 Maximum loan quantum under MSE smart scheme is Rs 200 Lacs in metro and
Urban centres, Rs 50 Lacs at other centres . Maximum Rs 5 Lacs for working
capital. Working capital alone can not be considered
 Age limit for applicants are 18-60 Years
 Loan quantum for furnishing of office premises / equipment is restricted to
20 % of the eligible loan quantum subject to maximum of Rs 20 Lacs .Loan
for furnishing rental office not permitted.
 Term loan assessment is based on minimum of a) 75 % of Project cost .b) 5
times of net annual income for loans upto Rs 10 Lacs c ) 10 times o net annual
income for loans above Rs 10 Lcas .Working capital needs can be sanctioned
upto 10 % of previous year’s receipt .
 Margin on working capital is Nil and on term Loan margin is 25 %
 Processing Charges / Upfront Fee: 50 % of normal charges
 Repayment period for term loan is 5-10 Years and tenability for working capital is 3 years.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 95 | P a g e
  If loan is not covered under CGTMSE, minimum collateral by way of land and
building at 25 % of loan amount is to be obtained.
 Loan component for construction activities should not exceed 80 % of total loan eligible
amount.
 Mandatorily coverage of loan up to Rs 100 Lacs in CGTMSE .

7. Canara MSME Expo

 The loan amount is linked to turnover of customer and is restricted to a
maximum of Rs 50 lakhs. For the purpose of participation in Trade fair /
exhibitions the maximum loan amount is restricted to Rs 25 lakhs .Only
exporters with a minimum turnover Rs 100 lakhs in the immediately preceding
year and having credit limit with us can avail loan under the scheme.
 If turnover is between 200-500 lacs and 500-1000 Lacs, maximum loan can be
sanctioned is Rs 20 Lacs and Rs 30 Lacs respectively.
 Only Term Loan can be sanctioned under the scheme
 Repayment period of term Loan is 3 years and repayment holiday can be upto 3 months
 Margin under the scheme is 15 -25 % of the project cost
 If CGTMSE coverage is not opted by borrower, primary / collateral security by
way of land and building to the extent of 100 % of the loan amount should be
obtained.
 Minimum DSCR must be 1.5 and Current Ratio must be 1

8. Canara Contractor Scheme (MSME Service)

Fund based limits (WC SOD), NFB-FLC, ILC, BG and Term loan can be provided to Civil, Mining and
constructors contractors under the scheme. Term loan can be granted for purchase of equipment
,construction / purchase of office premises .Existing clients with satisfactory track record for last 2
Years & new clients who confine their dealings with us can only be financed
Minimum permissible loan amount is Rs 10 Lac and maximum TL is Rs 5 Crore Maximum loan amount
of Rs 10 Crore can be considered under against the properties situated in semi urban and urban
centres. Vacant sites with no superstructure can be taken as security if allotted by government
approved local bodies but tenanted property can not be accepted .Valuation is to be carried out from
two panel valuers whenever loan amount exceeds Rs 2 Cr . Property in the name of trust can not be
accepted.
 Need based finance subject to a maximum of 9 times of TNW of the borrower.
 Limit to be secured by collateral to the extent of 125 % of limit.
 Margin for TL and NFB is 10 %.
 Tenability for working capital is12 months and repayment period for term loan
is 7 years and 5 years for construction activity and other than construction
activity.
 Processing Charges / upfront fee concession 25 %
 In scoring model if marks are above 75 % interest concession 0.75 % from
applicable rate ac is given and if marks are between 60-75 % interest
concessions 0.50 % from the applicable rate can be given.

9. Satkar scheme ( Now Closed : cir 180/2016)

 individual ,Proprietor ,Partner are eligible under the scheme for business
needs of restaurants / dhabas / eateries / mobile canteen /fast food centres
 Short term loan for 12 months can be granted based on stock holding required for 7 days.
 Maximum ceiling in rural area / villages is Rs 2 Lacs , Semi Urban / Taluka
Head quarter is Rs 5 Lacs and Urban / District Head quarter is 10 Lacs.
 Margin for Term loan is 15 % and Term loan is to be repaid in 5 Years.
 Upfront / Processing charges are 50 % of normal Charges ( nil for loan up to Rs 5 lakh )
 AGF of CGMSE is to be borne by : Bank
 ROI is BR +0.55 %

10. Pragati scheme ( Now Closed : cir 180/2016)

To meet business related needs including purchase/ construction of business
premises, machinery, equipments, vehicles and working capital requirements of

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 96 | P a g e
 Micro and Small Enterprises.
 Maximum Loan is Rs 10 Lac .Margin is 15 % ( Loan above Rs 25000 )
 ROI is BR +0.55 %
 Term Loan repayment is 7 years and WC tenability is 3 Years respectively.
Maximum moratorium is 6 months
 Processing Charges / Upfront fee is 50 % of normal Charges
 AGF is to be borne by Bank.

11. Unnati scheme

To meet business related needs including purchase/ construction of business
premises, machinery, equipments, vehicles and working capital requirements of
Micro and Small Enterprises.
 Minimum loan amount is Rs 10 Lacs and maximum loan amount is Rs 100 lacs Margin is 20
%
 ROI is BR +1.25 %
 The 0.50 % concession to women borrower and 0.25 % to CGMSE covered is available.
 Term Loan repayment is 7 years and WC tenability is 3 Year. Maximum moratorium is 6
months
 Processing Charges / Upfront fee is 75 % of normal charges
 If BD (90 day) is held as prime security, minimum margin is 25 %

12. OD MSME scheme

 Maximum Loan Rs 3 crore can be granted under OD MSME.
Maximum Tenability for OD MSME limit up to Rs 2 Lacs is 2 Years
Tenability for LR , NR and MR rated accounts under OD MSME scheme are 18 months , 15 months and
12 months. Mortgage of land and building with value not less than 125 % of the limit sanctioned is
required unde OD MSME.
 Vacant site with no superstructure can be accepted if allotted by Government
approved bodies but tenanted property can not be accepted.

13. Doctor’s Choice

 Maximum loan of Rs 5 cr can be granted in Doctor’s Choice scheme.
 Sub limit for working capital can be 20 % of the maximum limit subject to a ceiling of Rs 50
Lacs
 25 % margin is required ,if term loan is granted for construction of business
premises including construction of quarters and 20 % margin is required ,if
term loan is granted for purchase of equipment . Margin for working capital
needs is 20 %
 If loan is secured by way of mortgage of immovable property /approved
securities, value of which should not be less than 50 % of total limit permitted.
 Repayment period for term loan is 5-7 years with initial moratorium of 3-6
months. The moratorium may be extended to 12 months where construction of
business premises is involved. Tenability of working capital is 3 years .

 Financing Start Ups and Early Stage Units promoted by graduates of

reputed educational institutions

 WC / TL to MSME manufacturing and service units, to graduates of reputed

educational institutions, subject to a minimum of Rs 10 Lacs and maximum of Rs
200 Lacs for Startup and Rs 500 Lacs for Early Stage Units.
 Early stage Units are units which have not completed 3 years from the date of
commercial operation/first balance sheet.
 Promoters must be graduates from
IIMs/IITs/IIITs/ISBs/XLRI/IISCs/IISERs/Symbiosis Pune/Bangalore/MDI Gurgaon
or NITs).Age of the promoters must be between 20-50 years.  Margin : Working
capital 25 % , Term Loan 20 %
 ROI : Card rate as applicable to MSME units minus 0.25 %
 Repayment for project cost upto Rs 100 Lacs :7 Years excluding moratorium, but
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 97 | P a g e
 not to exceed overall tenor of 10 years
 Repayment for Project cost above Rs 100 Lacs→ 7 years & in exceptional case
upto 10 years, excluding moratorium, but not to exceed an overall tenor of 12
years.
 Loan upto Rs 100 Lacs: CGTMSE coverage or 50 % of the loan amount by way of
Land and Building /Approved securities/Our Bank deposit either
primary/collateral or primary and collateral put together
 Loan above Rs 100 lacs: 50 % of the loan amount by way of land and building
/approved securities/our bank deposits either primary/collateral or primary and
collateral put together.
 Upfront Fee for TL: 0.25 % of sanctioned loan amount. Minimum Rs 5000/-
Delegation of power vested with circle head CAC

Agriculture Advance
Targets:

 Coverage of Tenant farmers including Share croppers and Oral lessees(Cir

185/2010): minimum stipulated level 2.50%.
 Debt Swapping Scheme for Farmers : the envisaged flow of 3% of total credit flow
to agriculture (Cir 185/2010)
 Each Rural/Semi-Urban branches have to finance at least 250 New farmers each
year (Cir 266/2009)
Disposal Of Application:

 Loan amount up to ` 25000/- : within 2 weeks

 Loan amount > `25000/- : Branch-30 days, CO-45 days, HO-8-9 weeks.
 KCC with in Branch powers: 15 days (cir 35/2004)

Margin (Cir no.157/03, 1520/20004, 172/2004 & 255/2010):

 For Loans upto `1,00,000/- No Margin.(cir 255/2010)

 More than `1,00,000/- : 15 to 25% (for MF,SF upto `2 lacs:10-15%)
 Agri Clinics, Agri Business Centres, upto `5 lacs : No Margin Cir 172/04
 ALLHV: 10% (except MCVs and HCV – 25%) Cir 150/04
 Land Purchase Scheme: 20%
 Estate Purchase Loans: 50%

Security Norms (Cir no.157/03 & 255/2010):

Without Mortgage, upto `1,00,000/- (Cir 255/2010, 237/2012). Beyond `1 lakh,
mortgage. In case of KCC, Upto Rs.1.5 lakh, without mortgage. However for loans
above Rs.1 lakh , charge has to be created on lands wherever provision for charge
creation is available (online/Manual). Actual loan component should be taken into
account including subsidy amount receivable in general for deciding security norm,
if otherwise specified.

1. Kisan Credit Card Scheme

 Cultivation & other short term needs including consumption and Term Loan
requirement to owner cultivator/leased land holders .KCC shouldn’t be issued to
parties dealing in SCC commodities, minors, defaulters.
 Sub limit-I as per formula ,Sub limit-II - 3 years net annual income (Max Rs.5 Lakh)
 The Sub-limit is not a revolving facility. At the time of Annual review the Sublimit-
II shall be reinstated to the extent of repayment of Principal made during the year.
Loan limit should not exceed 50% of value of the produce
 Validity is 5 years .Term loan repayment with in 5 year from date of disbursement
 Each withdrawal under the short term sub-limit to be liquidated in 12 months
(short term crops)/18 months (in case of long term crops)
 No processing fee in case of limit upto Rs.3 lakhs for SF/MF.&Folio Charges @`100/- per
Quarter

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 98 | P a g e
 2. Canara Kisan OD Scheme
 Short term Agril needs which cannot be covered under KCC facility. The scheme is
not for crop production .Agriculturists with One year satisfactory dealings can be
financed up to maximum 4 times gross annual income with minimum Rs 1 lac and
maximum Rs 7.50 lacs ( if recovery percentage in scheme is above 90 % ,max Rs
12.50 Las ).
 Ceiling per acre mortgaged: Rs 1 lakh (`.1.50 lakh per acre) subject to 50% of
value of mortgaged landed property. With in overall limit, upto Rs 1 lakh can be
permitted for repayment of outside debts by farmer 
Tenability : 3 years
Interest: BR+2.10 %( Above Rs.3 lakh upto Rs.25 lakh), upto Rs.100 lakh , ROI for all loans above Rs
1 Cr – linked to scoring norms.
 Folio Charges @`100/- per folio ie 40 entries. Debited quarterly .At the time of
Annual review: Collection of 50% of normal processing fee in case of limits
above Rs.1 lakhs (with/without enhancement in limit).
 Eligible for ATM card
 Interest: Interest has to be debited half yearly, September/March. Interest
debited is to be recovered within a maximum period of 90 days

3. Kisan Suvidha Scheme

 Working Capital (for crop, allied activities) and Term Loan needs to owner
cultivator/leased land holders eligible.
 Assessment of sub limit I is done using the same formula we use for KCCS
 Under Sub limit 2 ie for term loan quantum is 3 years net annual income of the
farmer with max. Rs 5 lakhs
 Validity is 5 years
 Working capital drawings to be repaid in 12-18 months and each Term loan in 5
years from the date of disbursement.
 Folio Charges @`100/- per folio ie 40 entries. Debited Quarterly
 Processing fee to be collected at the time of sanction for the 5th year limit
which will be the sanctioned limit. At the time of Annual review: Collection of
25% of normal processing fee in case of limits above Rs.5 lakhs (with/without
enhancement in limit)

4. Krishi Mitra Credit Card Scheme

 Loan to tenant farmers, oral lessess, share croppers and farmers who have
lands, but do not have land records . Finance to only one person of a family
 Loan amount `50,000/- Total limit should not exceed 50% of the value of the
produce. Minimum 50% of loan for Crop Cultivation
 Interest @ BR+1.20 %. Interest subvention 2% and 3% for prompt repayment with in one
year
 Interest debited half yearly due in 90 days for running a/c and due along next
installment if loan is sanctioned as Term Loan.
 In case of single transaction limit, repayment in 5 years monthly/ quarterly/
half yearly / yearly instalments .Running limit or single transaction limit- OD
Tenablity 3 years
 No processing charges and No inspection charges
 RKBY applicable
 Target: 2.5% of fresh disbursements to KMCCS.

5. Produce Loan
 To keep the produce in an approved godown or warehouse or in farmers’
residence enabling them to sell the produce for a better price of a later date.
Loan proceeds to be adjusted to KCC/instalment of TL and repaid within 12
months from the date of grant.
 Also The subvention benefit is extended to eligible post harvest loans against
warehouse receipt to KCC holder Small & Marginal Farmer borrowers, for a
period of six months and
 Incentive subvention is extended to such of those loans closed promptly but
within 6 months from availing the loan.
 Rs 50 lacs is the restriction for Produce Loan to Corporate
 Variants of Produce loans
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 99 | P a g e
 1. Produce stored in their own houses/go downs/Leased go downs(Max-Rs.10 lakh)
2. Warehouse receipts of Central Warehousing Corporation(CWC)/State
Warehousing Corporation(SWC)/ Private sector Warehousing Units
3. Warehouse receipt financing under tie-up arrangements with Collateral Management
Companies
Financing against Negotiable Warehouse receipts of accredited Warehouses/Cold storages(Rs.25
lakhs(on lent amount)) 5. Financing the Private Cold Storage units / Private Warehouses by way of
WC limit against the Receivables Rs.25 lakhs(on lent amount)

6. Self Help Groups

 SHG is a small group consists of 10-20 members
 Group should be in active existence for at least 6 months ,maintain proper record and
account
 Group should have undertaken savings and credit operations from its own resources.
 Group should work democratically
 Group members should have homogenous background and common interest
 SHG members to attain skill up gradation and proper functioning.
 Finance to SHG is based on Savings i.e., 1:1 or 1:2 or 1:4 based on needs and
requirements.
 An appropriate repayment period may be fixed after discussing with the group
 The SHGs will not be in a position to offer any collateral security. Where assets
are created out of SHG finance, the same can be taken as prime security
 Delegation of powers to branches: `5 lakh-Smalls, `10 lakhs – Medium, `15
lakhs – large branch. Under NRLM: `5 lakhs, `10 lakhs, `15 lakhs (S,M,L)
 Direct lending to SHGs upto 1:4 of savings and beyond, in cases satisfying norms.
Housing finance to members of SHGs to maximum amount of Rs.75000/- per member

Government Sponsored Scheme

1. Prime Minister’s Employment Generation Programme (PMEGP)

PMEGP is to generate employment opportunities by setting up only new micro
enterprises, for sustainable employment to artisans’ employment to artisans and
unemployment youth.
 Maximum project cost in manufacturing sector: up to Rs 25 Lac, Business/service sector: Rs
10 Lacs
 Individuals above 18 years are eligible. No income ceiling under the scheme.
Applicant must be 8th class pass for manufacturing projects above Rs 10 Lacs&
service / business projects above Rs 5 Lacs.
 Subsidy: general borrowers 15 % in urban and 25 % in rural areas. For special category 25%
and 35 %
Repayment: 3-7 Years with moratorium

2. National Urban Livelihood Mission (NULM)

The Ministry of Housing and Urban Poverty Alleviation (MoHUPA) has restructured the existing SJSRY
and launched the National Urban Livelihoods Mission (NULM).
Component 4 of NULM is for Self Employment Programme (SEP) : 4.1 is for Individual Enterprises
(SEP-I) & 4.2 is for – Group Enterprises and SHGs (SEP-G)
Implemented in all District Head quarters and all the cities with population of 1 lakh or more. Age
Limit: 18 Years at the time of applying for loan. There is no maximum age limit. However, borrowers
above 70 years need not be entertained.
 Qualifications :For both components No minimum educational qualification
 Project cost / Quantum :SEP –I : Rs 200000/- , SEP-G : Rs 100000/-
 Margin: SEP-I : 15-25 % , SEP-G : 25 % or 4 times of the group’s savings .
 Subsidy (of project cost) :Interest Subsidy, being interest charged over and
above 7% rate of interest will be available for the term loans granted under
SEP-I and SEP-G.
 Repayment: 5 Years inclusive of maximum moratorium of 6- months.
 Loans granted under SEP-G are not eligible to be covered under CGMSE.
 Retail Trade activity is not eligible under SEP –I
 Working Capital needs of enterprises under SEP-I shall be considered out of
purview of the scheme guidelines and that is not eligible for interest subsidy.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 100 | P a g e
  Revolving Fund (RF)/working capital needs under SEP-G not eligible for interest subsidy.
 Women beneficiaries: 30 %. SCs and STs; population based. 3 percent
reservation to differently-able. 15 % of the physical and financial targets for the
minority communities.
 In addition to skill training of the beneficiaries, the ULB arrange to conduct
Entrepreneurship Development Programme for 3-7 days for individual and
group entrepreneurs.

3. National Rural Livelihood Mission (NRLM)

The Ministry of Rural Development, has launched NRLM by replacing the existing
SGSY scheme, to promote poverty reduction by building strong institutions of the
poor through capacity building of SHGs ( especially WSHG ) .Scheme is funded by
Centre : State Govt in the ratio of 75:25(90:10 NE,100%-UT).
 SHGs can avail either Term Loan or Cash Credit Limit or both based on need.
 Active existence at least since the last 6 months as per the books of SHGs not
from the date of opening of SB a/c. SHG should be practicing Panchasutra. They
are Regular meetings, Regular Savings ,regular inter-loaning ,timely repayment
and Up- to date Books of Accounts
 Quantum :
1. First dose: 4-8 times to the proposed corpus during the year (Min Rs.50, 000).
2. Second dose: 5-10 times of existing corpus and proposed saving during the
next twelve months or Rs.1 lakhs, whichever is higher.
3. Third dose: Minimum of Rs.2 lakhs, based on the Micro credit plan prepared by the SHGs
4. Fourth dose onwards: Between Rs.5-10 lakhs for fourth dose and / or higher in
subsequent doses.
 Contribution :No collateral & no margin will be charged upto Rs.10 lakh limit
to the SHGs Repayment installment should not be more than 50% of
incremental income
 Subsidy (of project cost) :No Capital Subsidy will be sanctioned to any SHG
from the date of implementation of NRLM .Interest subvention, to cover the
difference between the Lending Rate of the banks and 7%, on all credit from
the banks / financial institutions availed by women SHGs, for a maximum
ofRs.3,00,000 per SHG. The SHGs will also get additional interest subvention of
3% on prompt payment, reducing the effective rate of interest to 4%.
 For claiming interest subvention (both regular and additional of 3% on a/c of
prompt repayment) refer cir 52/14, 117/14 on operational guidelines.
 Repayment:
1. First dose of loan: 6-12 instalments.
2. Second dose of loan: 12-24 months.
3. Third dose: Monthly / quarterly / half yearly & it has to be between 2 to 5 Years.
4. Fourth dose onwards: Monthly/quarterly/half yearly & it has to be between 3 to 6 years.
 Provide a minimum Rs 10000/- and max of Rs 15000/- Revolving Fund to SHGs
in existence for a minimum period of 3/6 months and follow the Panchasutra .
 NRLM coverage: 50% to SC/STs, 15% are minorities and 3% are persons with
disability ultimate target of 100% coverage of BPL families.

4. Scheme for Rehabilitation of Manual Scavenger (SRMS)

The Objective of the revised SRMS Scheme aims at assisting the manual scavengers, identified during
various surveys, for their rehabilitation in alternative occupations. Manual Scavengers and their
dependents, irrespective of their income, will be eligible for assistance. This scheme replaced SLRS
scheme

Quantum :
 Term Loan- Up to a maximum project cost of Rs.15.00 lakhs for sanitation related
projects and up to Rs.10.00 lakhs for other activities.
 Micro Financing – Up to a maximum project cost of Rs.25, 000/- per scavenger. Micro
financing will be done through SHGs & NGOs
 Capital Subsidy :
 For Project cost upto Rs.200000/- : 50% of project cost
 For Project cost above Rs.200000/- upto Rs.5 lakhs: Rs 1 lac plus 33.3% of PC between 2-5 lacs
 For Project Cost from Rs 5 lac to 10 lac: Rs 2 lac + 25% of PC between 5-10 lac
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 101 | P a g e
 For Project Cost from 10 lacs to 15 lacs : 325000/-
 Interest Subsidy: To the extent of the difference in rate of interest will be reimbursed
to the bank by the Government / other agencies identified by Government.
 Interest: 5% upto Rs.25, 000/- proj. cost for others & 4% & for women beneficiaries
6% for project cost above Rs.25,000/-

.Differential Rate of Interest ( DRI )

 Annual family income Rs.18,000/-- in Rural and Rs.24,000/- in Urban and Semi-Urban areas
 Individual whose land holding does not exceed 1 acre of irrigated and 2.5 acres of
un-irrigated land. No land Ceiling for SC/ST engaged in Agriculture and Allied
activities.
 Quantum Maximum : quantum Rs.15,000/- (For physically
handicapped additional loan of Rs.5000/- for artificial
limbs/Braille typewriter ) 
Interest : 4% Simple
 Housing Loans under DIR Rs.20,000/- for SC/STs and Rs.15,000/- for others
 2/3rd of DIR loans in Rural & Semi Urban
 Minimum 40% to SC/ST beneficiaries

TEST YOURSELF : AGRICULTURAL ADVANCES, GOVT. SPONSORED SCHEMES, PRIORITY SECTOR

QUESTIONS ON PRIORITY SECTOR LENDING

1. Mandatory targets under Priority Sector for Domestic Banks in India are:
a)40% of outstanding credit of previous year b) 33% of outstanding credit of previous year
c) 33% of ANBC d) 40% of ANBC
2. Targets of Micro Enterprises within mandatory Priority sector target is:
a) 40% of ANBC b) 25% of ANBC c) 7.5% of ANBC d) None of the above
3. What constitutes Priority Sector under MSME segment ?
a) Micro Enterprises b) Micro & Small Enterprises c) Medium Enterprises
d) All of the above e) A & B above
4. Criteria for classification of an enterprise as Micro, Small or Medium is based on the:
a) Total turnover of the enterprise b) Investment in P & M / equipment
c) Total profitability of the enterprise d) Original cost of investment in P&M / equipment
5. Non achievement of Priority Sector targets attracts
a) Penal intt @ 6% b) Increased provisioning
c) Accelerated provisioning d) Investment of shortfall as advised by RBI
6. Limits to Retail Traders upto Rs _____to be classified under priority sector-MSE
a) 20 lacs b) 100 lacs c) 200 lacs d) 500 lacs
7. Limits to Whole sale Traders upto Rs_____to be classified under priority sectorMSE
a) 50 lacs b) 100 lacs c) 200 lacs d) 500 lacs
8. Lending to which of the following activities is part of priority sector (1) agriculture (2) micro &
small enterprises (3) renewable energy (4) social infrastructure (5) export credit
a) 1 to 5 all b) 1 to 4 only c) 1, 2 & 4 only d) 1,2 3 & 5 only
9. Priority sector targets are 40% of (a) adjusted net bank credit (b) credit equivalent of OBS
exposure (c) which ever is lower (d) which ever is higher
a) Only a b) A and b both c) A, b & c together d) A, b & d together
10. Agriculture advances within the overall priority sector lending target should be
______________of ANBC or CEOBSE which ever is hgher for ___________ Banks
a) 18%, domestic & foreign banks with 20 or more branches
b) 4.5 % , domestic banks and foreign banks with 20 or more branches
c) 18%, domestic and foreign banks with less than 20 branches
d) 18% , for all categories of banks.
11. Lending target for weaker section with in the priority sector are ___of ANBC or CEOBSE
whichever is higher.
a) 10% b)15% c)25% d)15%
12. Lending targets for weaker section within the priority sector are _____________ of total
priority sector lending.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 102 | P a g e
 a) 10% b) 25% c) 40% d)None of the above, only as % of ANBC
13. What is the lending target in priority sector for for small and marginal farmers within
agriculture.
a) 8% of ANBC b) 7% of ANBC c) 8% of agriculture loans d) 7% of agriculture loans
14. What is the lending target in priority sector for micro enterprises ?
a) 7.5% of ANBC b) 7% of ANBC c) 8% of ANBC d) 7% Oof MSE loans
15. What ils the target for incremental export credit over corresponding date of preceding year, for
domestic banks under priority sector ?
a) 2% of ANBC or CEOBSE b) 2.5% of ANBC or CEOBSE
c) 2.5% of priority sector loans d) 2.5% of total bank credit.
16. Amount deposited by a bank in lieu of shortfall in achievement of priority sector
target in a fund managed by National Housing Bank will be part of ________________ within
priority sector.
a) Agriculture loans b) Housing loans
c) MSME loans d) None of the above, as it is a non-priority sector investment.
17. In case of DRI advances, which of the following target is correct ?
a) 1% of the outstanding advances of the previous year.
b) 2/3rd credit should go to SC/ST
c) 40% advance should be through rural/semi-urban branches
d) 40% advances to SC/ST and 2/3rd should be through rural & semi-urban
branches.
e) A, b & c all
18. Domestic banks are required to deposit in RIDF with NABARD, the shortfall in respect of :
a) Agriculture advances target of 18% b) Priority sector target of 40%.
c) Weaker section advances of 10% d) A,b,c e) A & b only
19. The period of deposit and interest rate for deposit with RIDF and SEDF are fixed by
:
a) NABARD in case of RIDF b) SIDBI in case of SEDF
c) RBI in both the cases d) Ministry of Finance
20. Which is not included for achieving weaker section loan targets in priority sector.?
a) Small farmers b) NRLM loanee c) Loans upto 100000 to women beneficiaries
d) Loans to distressed poor for pre-payment to non-institutional lenders e) PMEGP advances.
21. Which of the following target is not correctly matched as percentage of priority sector:?
a) Agriculture – 45% b)Weaker Section - 25%
c) DRI – 1% Housing loan to Housing Finance Companies for onlending – 5%
22. Commercial Banks are to compute their obligation to provide finance for housing at
of their as at the last of March of previous year.
a) 3%, total deposit, Friday b) 5%, total credit, reporting Friday c) 3%, incremental deposit,
reporting Friday d) 3%, incremental credit, Friday e) 3%, ANBC, Friday
23. For achieving target for advances to women enterprises, a women enterprise means where in
addition to management by women, the contribution of women in the capital of the business activity
is not less than:
a) 26% b) 49% c) 51% d) 75%
24. What is the priority sector target for RRBs with reference to their ANBC.
a) 32% b) 40% c) 60% d) None of the above
25. Loans to Custom Service Units managed by individuals or entities who maintain a fleet of farm
equipments and undertake farm work on contract is excluded from Agriculture but could be included
in MSME based on investment.
a) True b) False
26. Loans to RRBs for on-lending to agriculture & allied activities is to be included in Agriculture-
priority
a) True b) False
27. To ensure continuous flow of credit to priority sector, monitoring of priority sector lending
compliance of banks will be done on a:
a) Monthly basis b) Quarterly basis c) Half yearly basis d) Annual basis
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 103 | P a g e
 28. Loans to Food & Agro Processing units up to an aggregate sanctioned limit of
Rs. per borrower should be classified under
a) 5 crores, Agriculture Infrastructure b) 15 crores, MSME c) 100 crores, Agriculture
Infrastructure d) 100 crores, Agriculture Ancillary activities
29. What will be the classification of an Education Loan of Rs 25 lacs for overseas studies.
a) Entire amount under priority b) Entire amount under Non priority c) Rs 20 lacs
under Priority and balance under Non priority d) Rs 10 lacs under priority and balance
under non priority
30. A Khadi & Village Industry unit having original investment in Plant & Machinery of Rs 525 lac
should be classified under:
a) Micro Enterprises b) Small Enterprises c) Medium Enterprises d) Large
Enterprises
31. Bank loans up to Rs _____ per borrower for building social Infrastructure activities like health
care, sanitation or water facilities in centres with populations less
than lacs can be classified under Priority – Social Infrastructure.
a) 2 crores, 1 lac b) 5 crores, 1 lac c) 15 crores, 10 lacs d)100 crores, 10 lacs
32. Overdrafts upto Rs 5000 under PMJDY should be classified under Priority – Others, provided
household annual income does not exceed Rs ____ for rural areas and Rs in non- rural areas.
a) 60000, 120000 b) 100000, 160000 c) 100000, 200000 d) No income criteria
33. Bank loans upto Rs to borrowers, other than individual households for
purposes like solar based, bio mass based power generators, wind mills etc. should be classified
under Priority Sector-Renewable Energy.
a) 1 crore b) 5 crores c) 15 crores d) 100 crores
34. Housing loans to individuals at Metro centres upto Rs should be classified under Priority
provided the dwelling unit cost does not exceed Rs
a) 15 lacs, 20 lacs b) 20 lacs, 25 lacs c) 24 lacs, 30 lacs d) 28 lacs, 35 lacs
35. Housing loans to individuals at other centres upto Rs should be classified under Priority
provided the dwelling unit cost does not exceed Rs
a) 15 lacs, 20 lacs b) 20 lacs, 25 lacs c) 24 lacs, 30 lacs d) 28 lacs, 35 lacs

MSME - QUESTION
1. The features of Canara MSME CAP are
a. CGTMSE cover is __________________ ( mandatory / not mandatory / not eligible
). Ans : Not eligible
b. Minimum quantum of loan is Rs__________ Lacs . Ans : 10 Lacs
c. Maximum quantum for manufacturing unit is Rs _____ Lacs and Service unit is
Rs _____ Lacs Ans :Rs 500 Lacs , Rs 200 Lacs.
d. Maximum Term Loan under the scheme is Rs _____ Lacs . Ans :
Rs 200 Lacs
e. Term loan alone can be sanctioned ? Ans : No
f. Margin for TL ,WC and NFB is _____. Ans : 10 %
g. Repayment period for Term Loan is _____and tenability for working capital is
_____________ . Ans: 5-10 Years , One year
h. Property of unencumbered residential house /flat / commercial property
/Industrial property situated in __________________ centres in the name and possession of
the unit or promoters of unit either self occupied or vacant or partially tenanted are permissible.
Ans : Merto, urban and semi urban
i. Value of property for manufacturing unit should be _________ of loan amount and
for service unit it should be ______________________ of loan amount against the property
situated in urban and metro areas . Ans : 100 % , 125 %
j. Value of property for manufacturing unit should be _________ of loan amount and
for service unit it should be ______________________ of loan amount against the property
situated in semi urban . Ans : 125 % , 150 %
k. Is it mandatory to get 2 valuation even though the value of property is less than 10 Cr.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 104 | P a g e
 Ans : Yes ( for every proposal )
l. Concession in processing fee/upfront fee is _______ . Ans : 50 %
m. Whether 0.50 % concession to women entrepreneur is to be considered under
the scheme. Ans : No
n. Fresh valuation to be obtained from penal valuer in every ___. Ans : 3 Year
o. Stock audit for LR/ NR is . Ans : Waived
p. Stock audit for MR is ______________. Ans : to be done every year
q. Periodicity of stock statement submission and inspection is . Ans :
Half Yearly
2. MSE Saral - SCHEME WITHDRAWN W E F 01-04-2016
3. The features of MSME Vahan are
a. Whether finance for second hand vehicle is available under the scheme: Ans : No
b. Can we finance for goods carrier or purchase of vehicle to run taxi service. Ans: No
c. Can we finance retail traders under the scheme? Ans : Yes
d. Maximum quantum of finance under the scheme is Rs ___. Ans : 25 Lacs

e. Requirement of loan quantum above Rs 25 Lacs can be permitted by Ans : Circle Head
f. Margin is ____. Ans : 10 %
g. Quantum is calculated on the basis of average of last _____ of net profit .Ans : 3 years
h. ROI is Ans : MCLR + 0.80 %
i. 0.50 % Interest concession to women entrepreneur and 0.25 % to CGMSE covered
accpunt s are to be extended under the scheme ( True / False ). Ans : False
j. AGF of CGMSE for loans uptoRs 10 Lacs is borne by Bank.( True / False ) Ans : False
[shall be borne by the borrower – Cir No:246/2016]
k. For loans above Rs 10 Lacs , it is at the option of borrower to take cover under
CGTMSE , else collateral security to the extent of ___________________ of the loan amount
to be taken . Ans : 100 %
l. Repayment period for 4-wheeler and 2-wheeler are ____ and ____ respectively. Ans : 84
months , 60 months
m. Whether DD is to be issued in favour of vedor / supplier ? Ans : No ( Only RTGS/NEFT )
n. Upfront fee under the scheme is _______ . Ans : 0.25 % of loan amount.

4. The features of Canara carvan are

a. Loan scheme is for existing Transport operators
. having _____ of experience .Ans
: 3 Years
b. This scheme is only for passenger vehicle only ( True / False ) . Ans :
false ( both goods and passenger vehicles are permitted )
c. Whether working capital can be provided under the scheme ? Ans : NO ( only Term Loan )
d. Repayment period under the scheme is
f. Maximum loan of Rs _____ can be granted under the scheme. Ans : Rs 5 Cr
g. Whether takeover is permitted ? Ans : No
h. Margins are linked to scores under scoring matrix . Margin under insurance +
registration irrespective of score is ____. Min 50 %
i. For scores between 40-75 % ,margin for cost of chassis ,cost of body and fully built
model is _____, _____ and _____. Ans : 10 % , 45 % , 15 %
j. For scores above 75 % ,margin for cost of chassis ,cost of body and fully built
model is _____, ____ and _______________ . Ans : 5 % , 40 % , 10 %
k. If CGTMSE cover is not available , minimum ________ % of collateral security by
way of land and building is to be obtained. Ans : 25 %
l. Interest concession depends upon scoring matrix. Interest concession __ % is available
in case of score above 75 % , ____ % concession is available in case
of score between 50 -75 % . Ans : 1 % , 0.50 %
m. __________ % Upfront fee concession is available in case of score above 75 % .Ans : 0.25 %

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 105 | P a g e
 Whether old vehicle can be financed under the scheme ? Ans : No Ans : 60 months
e. Requirement of minimum ____ vehicles or minimum loan amount of Rs _____
Lakhs permitted under the scheme. Ans : 5 , 25
n. Overall DSCR must be min o. Ans : 1.50

5. The features for scheme launches for financing Start Ups and Early Stage Units are
a. Maximum loan quantum for Start Ups is Rs _____ and Early Stage unit is
Rs ________________: Ans : Rs 200 Lacs , Rs 500 Lacs
b. Minimum Loan quantum is Rs _______ . Ans : 10 Lacs
c. Age of Promoter should be between ___________ . Ans : 20-50 Years
d. Early stage units are units which have not completed _____ Years from the date of
commercial operation /First Balance sheet. Ans : 3 Years
e. Margin for working capital is ____ and Term loan is ___ Ans : 25 % , 20 %
f. ROI is _________ Ans : Card rate as applicable to MSME minus 0.25 %
g. Repayment for project cost upto Rs 100 Lacs is ________ years, ____________ (
excluding/including ) moratorium but not to exceed overall tenor of ____________________
Years . Ans : 7 Years , excluding , 10 Years
h. Repayment for project cost above Rs 100 Lacs is _______ years, _____________
( excluding/ including ) moratorium but not to exceed overall tenor of __________________
Years . Ans : 7 Years , excluding , 12 Years
i. Land and building ( Building /Residential building ) situated in semi urban/urban/metro
centres whose value shall not be less than _____ % of the limit sanctioned . Ans : 50 %
j. Upfront fee is _____ of sanctioned limit. Minimum is Rs _____/- . Ans :0.25 % ,
5000/-
k. Delegation of power vested with ___________. Ans : Circle Head CAC

6. The features of MSE Vijeta – Model II [Model I withdrawn w.e.f. 01-04-2016] are:
a. Maximum loan Rs Lacs can be sanction under the scheme.
Ans: Rs 200 Lacs
b. Margin for loan under model II ( 10-200 Lacs ) is _____. Ans : 20 %
c. Under model II , if borrower wishes to offer collateral security ( by way of EMT of
property ) in lieu of CGTMSE coverage , the value of such collateral security
should not be less than of loan amount . Ans : 60 %
d. Tenability of working capital is _____ and and repayment period of Term Loan
under MSE Vijeta is _______________________Ans : 2 Year , 84 months
e. ROI under model II is __________. Ans : LOW & NORMAL RISK MCLR + 1.30
% , MODERATE RISK MCLR + 1.55 %
f. Concession of 0.25 % in ROI is considered if account is covered under CGTMSE
Model II . ( True / False ) Ans : true
g. Stock statement is submitted once in ___________ and inspection is conducted
once in ____________________ Ans : Once in Six months , Once in Six months
h. Inspection charges are _________ . Ans : Fully waived
j. Processing Charges under Model II are___. Ans : 75 % of normal charges
k. Loan to retail traders can be granted under MSE Vijeta Scheme ( Yes/No) : Ans : Yes. Trader
to provide collateral 60% of of loan amount.
7. The features of MSE Smart are
a. Maximum loan quantum under MSE smart scheme is Rs__________________in metro
and Urban centres , Rs _____ at other centres . Maximum Rs ____________ for working
capital .Ans : Rs 200 Lacs , Rs 50 Lacs , Rs 5 Lacs
b. Age limit for applicants are . Ans 18-60 Years
c. Loan quantum for furnishing of office premises / equipment is restricted to
_________% of the eligible loan quantum subject to maximum of Rs _________ Lacs
.Ans: 20 % , 20 Lacs .

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 106 | P a g e
 d. Term loan assessment is based on minimum of a) % of Project cost .b)
_____ times of net annual income for loans uptoRs 10 Lacs c ) _____ times o
net annual income for loans above Rs 10 Lcas . Ans : 75 % , 5 times
, 10 times
e. Working capital needs can be sanctioned upto 10 % of ________________ Ans :
previous year’s receipt
f. Margin on working capital is ____ and on term Loan margin is ____. Ans : Nil , 25 %
g. Whether working capital alone can be considered ? Ans : No
h. Whether the professional can avail loan for furnishing in his rental office ? Ans : No
i. Processing Charges / Upfront Fee : Ans :50 % of normal charges
j. Repaymentperiodfortermloanis_____andtenabilityforworkingcapitalisAns:5-10Years,3years
k. If loan is not covered under CGTMSE , minimum collateral by way of land and
building at ______________ of loan amount is to be obtained . Ans : 25 %
l. Loan component for construction activities should not exceed ____ of total loan
eligible amount. Ans : 80 %
m. Mandatorily coverage of loan upto Rs ____ in CGTMSE. Ans : Rs 100 Lacs

8. The features of Canara MSME Expo are

a. Only exporters with a minimum turnover Rs __________ lakhs in the immediately
preceding year can avail loan under the scheme. Ans : Rs 100 Lakh
b. Whether any exporter not having credit limit with us can avail the loan ? Ans : No
c. Whether OD limit can be sanctioned under the scheme ? Ans : No ( Only TL )
d. Repayment period of term Loan is
e. Repayment holiday can be upto ________ . Ans : 3 months
f. The loan amount is need based , linked to turnover of customer and is restricted
to a maximum of Rs lakhs . For the purpose of participation in Trade fair
/ exhibitions the maximum loan amount is restricted to Rs ____ lakhs . Ans : 50 lakhs ,25 lakhs -
Ans : 3 years
g. Margin under the scheme is________. Ans : 15 -25 % of the
project cost
h. If CGTMSE coverage is not opted by borrower , primary / collateral security by
way of land and building to the extent of _______________ % of the loan amount should be
obtained . Ans : 100 %
i. Minimum DSCR must be . Ans : 1.5
j. Minimum Current Ratio must be ____________________ Ans : 1
k. If turnover is between 200-500 lacs and 500-1000 Lacs , maximum laon can be
sanctioned is Rs _________________ and Rs ________ respectively.
Ans : Rs 20 Lacs , Rs 30 lacs

9. The features of Canara Contractor Scheme ( MSME Service) are

a. Whether fund based limits ( WC SOD ) , NFB-FLC,ILC ,BG and Term loan can
be provided under the scheme ? Ans : yes
b. Whether Term loan can be granted for purchase of equipment ,construction /
purchase of office premises ? Ans : Yes
c. Which types of contractors can be financed under the scheme ? Ans :
Civil , Mining and constructors
d. Existing clients with satisfactory
.
track record for last 2 Years & new clients who confine their dealings with us can only be
financed ( True/ False ). Ans : True
e. Maximum permissible Term Loan is Rs ____. Ans : 5 Crore
f. Minimum permissible loan amount is Rs _____- Ans : 10 Lac
g. Maximum Term loanof Rs ______________ can be considered under against the
properties situated in semi urban and urban centres Ans : Rs 5 Cr
h. Need based finance subject to a maximum of _____________ of the borrower .
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 107 | P a g e
 Ans : 9 times of TNW
i. Limit to be secured by collateral to the extent of __________ % of limit.
Ans : 125
j. Margin for TL and NFB is _______ . 10 %
k. Tenability for working capital is _____ and repayment period for term loan is
_____ and years for construction activity and other than construction
activity. Ans : 12 months , 7 Years ,5 Years
l. Processing Charges / upfront fee concession _______ .. 25 % concession
m. Whether vacant sites with no superstructure can be taken as security ? Ans :
Yes ( if allotted by government approved local bodies )
n. Whether tenanted property can be accepted ? Ans : No
o. When valuation is to be carried out from two panel valuers ? Ans :
When loan amount exceeds Rs 2 Cr
p. Whether property in the name of trust can be accepted ? Ans : No
q. Whether stock statement need to be submitted ? Ans : No
r. Inspection is to be conducted every ____________ Ans : Half Yearly
s. In scoring model if marks are above 75 % interest concession _____ from applicable
rate to be given and if marks are between _____ interest concession
0.50 % from the applicable rate can be given .
Ans : 0.75 % , 60-75 %
t. Minimum value of the collateral security by way of immovable property in the form of land and
building ( situated in semi urban ,urban & metro centres) should
be . Ans : 125 % of loan amount

10. The features of OD MSME scheme are

a. Maximum Loan Rs _____ can be granted under OD MSME . Ans : Rs 3 Cr
b. Maximum Tenability for OD MSME limit uptoRs 2 Lacs is ___. Ans : 2 Years
c. Tenability for LR , NR and MR rated accounts under OD MSME scheme are
____________ , ______ and ________ . Ans : 18 months , 15 months ,12 months
d. Mortgage of land and building with value not less than ____________% of the limit
sanctioned is required under OD MSME. Ans : 125 %
e. Vacant site with no superstructure can be acceted / can not be accepted .Ans : can be
accepted if allotted by Government approved bodies
d. f. Tenanted property can be /can not be accepted . Ans :
Cannot be
g. Stock inspection periodicity for limit upto Rs 10 Lac is _____ and for limitQuarterly

11. The features for Doctor’s Choice scheme is

a. Maximum loan of Rs ____ can be granted in Doctor’s Choice scheme. Ans : Rs 5 Crore
b. Sub limit for working capital can be _______________ % of the maximum limit subject to
a ceiling of Rs_________________ . Ans : 20 % , Rs 50 Lacs .
c. _____ % margin is required ,if term loan is granted for construction of business
premises including construction of quarters . Ans :25 %
% margin is required ,if term loan is granted for purchase of equipment
. Ans : 20 %
e. Margin for working capital needs is _________________ Ans : 20 %
f. If loan is secured by way of mortgage of immovable property /approved securities
,value of which should not be less than _________________ % of total limit permitted .
Ans : 50 %
g. Reapment period for term loan is ________with initial moratorium of _____
The moratorium may be extended to __________________________ where construction of
business premises is involved. Ans : 5-7 Year , 3-6 months , 12
months

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 108 | P a g e
 h. Tenability of working capital is _____________________ Ans : 3 years
i. Simplified stock statement and /or book debt statement should be submitted in
every _____________________ . Ans : Quarter

12. SATKAR SCHEME IS WITHDRAWN W.E.F. 01-04-2016

13. PRAGATI SCHEME IS WITHDRAWN W.E.F. 01-04-2016
14. The features of Unnati scheme are
a. Minimum and maximum loan amount is Rs 10 Lacs , Rs 100 lacs
b. ROI is
c. Whether the 0.50 % concession to women borrower and 0.25 % to CGMSE
covered is available . Ans : Yes
d. Margin is ________________________ Ans : 20 %
e. Term Loan repayment and WC tenability is__________ Ans : 7 Years , 3
Year
f. Processing Charges / Upfront fee is ________________ Ans : 75 % of normal
charges
g. Maximum moratorium is ______ months Ans : 6
If BD (90 day) is held as prime security , minimum margin is _____ Ans : 25 %
h. Submission of stock statement is
i. Stock inspection in every______ months Ans: 3
15. The features of Rice Mills Scheme are
a. The maximum and minimum finance under the Rice Mill scheme are ___________
Ans : Rs 25 Cr and Rs 10 Lacs
b. Mortgage of immovable property acceptable to the Bank- Either Primary or
Collateral or Primary and Collateral and whose value is not less than _________________
of the limits permitted . Ans : 50 %
c. If security comfort is 100 % and above ROI would be____________ and if security
comfort is 75 % % above ROI would be . Ans : BR
+0.50 % , BR +0.75 %
d. If security comfort is between 50-75 % ROI in Rice Mill scheme would be
Ans : BR + 1.00 %
e. Whether further interest concession of 0.50 % to women borrower can be extended
( Yes /No ) Ans : Yes
f. Is it open scheme? ( Yes / No ) Ans : Yes

16. The features for “Flavour “ scheme is

a. Maximum quantum under model I and model II is Rs ____ and Rs _____, Ans : Rs 10
lacs , Rs 100 Lacs
b. Margin under model I and model II is _______ and _______ . Ans : 15 % , 20
% of project cost
c. Appicable processing charges and upfront fee in model I and model II are
________________ -and___________ . Ans : 50 % of normal charges , 75 % of normal
charges
d. ROI under model I and model II is and . Ans :
BR+0.55 % , BR + 1.25 %
Maximum repayment period is . Ans : 7 years ( 2-3
months repayment holiday )
f. Is it Open scheme .( Yes / No ) Ans : No ( approved for 12th plan
period 2012-17
17. The features for Canara Dal Mill Super are
a. Minimum and maximum loan amount under the scheme is Rs ____ &Rs _____. Ans : Rs
10 Lacs&Rs 10 Cr
b. Rate of interest is linked to Base rate and . Ans :
Value of collateral security
c. Minimum collateral security by way of mortgage of immovable property is
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 109 | P a g e
 _____________ . Ans : 75 %
d. If collateral security by way of mortgage of immovable property is 100 % and
above ROI in Working capital and Term Loan would be __________________________ and
_________________ . Ans : BR +0.75 % , BR +1.25 %
of e. If collateral security by way of mortgage of immovable
property is 75 % and above but less than 100 % of the limit ,ROI in Working capital and Term Loan
would be
+1.50 %
f. Whether interest concession to women borrower and CGMSE covered account
may be extended ? ( Yes /N0 ) Ans : Yes

18. The features for Quasi equity ( Risk Capital ) scheme is

a. Minimum loan of Rs _________ and maximum of Rs ___________ can be granted
under the scheme. Ans : Rs 25 Lacs , Rs 10 Cr
b. Whether working capital can be provided under the scheme ? ( Yes /No ) Ans : No
c. Total tenure of assistance including moratorium period is _____. Ans : 7
Years
d. Mortatorium period of principal installment is __________ Ans : 3 Years
e. Under quasi equity capital scheme sub debt assistance should not exceed 1/3rd
of the ____________________________ of the enterprise at the time of sanction .
Ans : Post – Project Tangible Networth
f. Borrower must have________ of profitable track record . Ans : 3
Years
g. Whether intangible expenses like marketing , brand building ,product development ,R & D
, quality control expenditure ,energy efficiency equipment
etc can be financed under the scheme ?( Yes / No ) Ans : Yes
19. The features of TEQUP are
a. Under TEQUP ,project , government grant to the extent of_____________ % of the
project cost is provided , Subject to a maximum of Rs _______________ . Ans : 25 % , Rs
10 Lacs
b. Under TEQUP , projects upto Rs 1 Crore , promoter’s contribution is __________ of
project cost . Ans : 25 %
c. Under TEQUP , projects above Rs 1 Crore , promoter’s contribution is ___________
of project cost . Ans : 20 %
d. Repayment period under the scheme is _____ years with an initial moratorium
months . Ans : 5 Years , 6 months
e. Minimum ____% enery savings over the baseline immediately upon completion of the
energy audit is required to release the grant by Scheme Steering
Committee. Ans : 15 %
f. If unit become non operational within _____________ of the receipt of Govt grant
,Govt grant need to be refunded along with the interest at _______________________ from
the date of closure till date of refund . Ans : Two Years , Bank’s
Base rate
g. If it is found that Govt grant has been availed on the basis of any false information
,Govt grant need to be refunded along with interst at __________________ from the date of
disbursal to date of refund. Ans :Bank’s Base rate prevailing at the
time of invoking penal clause .

20. Maximum interest subvention in weavers credit card scheme is capped at

a. 3 %, b) 5 %, c) 6 % d)7 % Ans : d

21. Margin money assistance is Rs _____________ per weaver to individual weavers ,

their ,SHG and JLG
a. Rs 10000 b. Rs 20000 c. Rs 25000 d. Rs 50000 Ans : a
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 110 | P a g e
22. Subisidized term loan and working capital loan to Handloom sector is provided at
the interest rate of _____ for a period of _____________
a. 6 % , 3 Years b. 6 % , 5 Years c. 7 % , 3 Years d. 7 % , 5 Years Ans : a
23. All offline and online MSME loan applications received are to be inwarded and
sanction / disbursement / rejection details are upated in ______________________
a.Sahayata Package b. Suvidha Package c. Satkar Package d. MSME connect Package Ans : b

24. Large Roasting units , small roasting units , women and SC/ST beneficiary are eligible for
subsidy support of ___ ,_____, _____ of machinery cost respectively with a ceiling of in
Flavour scheme
a. 25 % , 35 % ,40 % and Rs 50 lacs b. 20 % , 30 % ,35 % and Rs 50 lacs
c. 20 % , 25 % , 30 % and Rs 40 Lacs d. 25 % , 35 % , 50 % and Rs 60 Lacs Ans : a
25. In Flavour scheme ,small commercial gourmet roasting units with less than _____ capacity are
eligible for subsidy support of _____% of the cost of machinery with a maximum ceiling of Rs
a. 10 Kg , 35 % , 10 Lacs
26. In which combination the roasting, grinding and packaging machinery are eligible for subsidy
a. Roasting machine, grinding machine and packaging machine.
b. Roasting machine and packaging machine.
c. Grinding machine and Packaging machine d. All above Ans :d

27. Minimum and maximum quantum under Rice Mill Scheme is : Rs 10 Lacs , Rs 25 Cr

28. If security comfort by way of equitable mortgage of immovable property is 75 %

and above ( but below 100 % ) , applicable ROI under Rice Mill Scheme is : Base rate +
0.75 %
29. If security comfort by way of equitable mortgage of immovable property is 50 % and above (
but below 75 % ) , applicable ROI under Rice Mill Scheme is : Base rate + 1.00 %
30. If security comfort by way of equitable mortgage of immovable property is 100 %
and above , applicable ROI under Rice Mill Scheme is : Base rate + 0.50 %
31. Minimum amount of bills under BULC scheme should not be less than Rs ____ and
usance period of bills should not exceed ______________ . Ans : 5 Lac ,180 days
32. Entire term loan amount (inclusive of grant portion included in the loan component)
shall be released to the beneficiary within __________________ on receipt of pro-rata grant
from Coir Board. Ans : 10 calender days
33. In case of non release of the term loan amount within stipulated time norms on receipt of grant
from coir board, Bank shall pay interest on the pro-rata grant
released by Coir Board, at _______________________ Ans : Running rate of interest on
deposit.
34. Under REMOT scheme beneficiary’s contribution , Bank credit and Rate of subsidy is _____ % of
project cost , ____ % of project cost and ____ % of project cost . Ans : 5 % , 55 % , 40 %
35. Under REMOT scheme of coir board , the maximum admissible cost of project is Rs ____ plus
working capital which shall not exceed _____ % of the project cost . Ans : 10 Lacs , 25 %

AGRICULTURE -Questions
1. Security to be stipulated For loans under revised KCCS 5th year limit upto 150000/-
A. Hypothecation B. Mortgage C. Both D. Vary case to case
2. Where tie-up arrangements (like in case of sugar factory, Tobacco Board etc.,)
are available for recovery, loans upto Rs ................................ can be extended without
insisting on mortgage under KCCS/ Investment /Development loans either individually or put
together.

A. 2 lakh B. 3 lakh C. 4 Lakh D. 5 lakh

3. WC requirement for allied activities (B) and for farm machinery maintenance (C)
component of KCC should not exceed ............................... % of Scale of finance (A).

A. 15 B. 20 C. 25 D. 30

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 111 | P a g e
 4. Sub limit for consumption need (D) under KCC is 10% of A+B subject to maximum
of Rs ......................

A. 10000 B. 20000 C. 15000 D. 50000

5. Sub limit for non farm sector (E) for KCC limit is 20% of the projected turnover
not exceeding .......................... % of (A) + (B)

A. 15 B. 20 C. 25 D. 30
6. KCC Limit will be ................ year requirement assessed with ................. % annual
increase projected over current year requirement (Subjected to annual review)-

A. 2ND , 5 B. 3RD, 10 C. 5TH, 1O D. 10TH , 20

7. Sub-limit – II under revised KCC shall be limited to 3 times the annual net income
of the farmer/ maximum of Rs ............................... LAKH

A. 1 B. 3 C. 5 D. 10

8. The operative short term KCC limit is valid for .................... Years subject to annual
review.
A. 1 B. 3 C. 5 D. 10
9. In case of short duration crops each withdrawal under the short term sub limit is
to be liquidated in ......................................... Months.

A. 10 B. 12 C. 15 D. 20
10. Margin for loan upto Rs. Five lakhs granted under Agriclinic and agribuisness center- A.
10-15% B. Nil C. 15-25% D. 50%
11. A KCC account is considered nonperforming when a drawal and interest
demanded, remains unpaid for a period of................................ crop seasons in case of
short duration crops.
A. 1 B. 2 C. 3. D. 4
12. In case of long duration crops, account becomes non- performing when a drawal
and interest demanded, remains unpaid for a period of ....................................... Crop
season.

A. 1 B. 2 C. 3 D. None
13. Branch Power KCCS is to be sanctioned within ................................. days from the
receipt of application completed in all respects-

A. 10 B. 15 C. 25 D. 30
14. Branch Manager may consider a higher quantum of loan for crop maintenance to
the extent of .......................................................over and above the scale of finance.

A. 10-15% B. 15-25% C. 50% D. No power to finance above Scale of finance

15. KCC limit should not exceed ............................. % of value of the produce -
A . 2 5 B . 5 0 C . 7 5 D. 1 0 0
16. Components under KCCS are to be segregated and interest subvention and
incentive will be available only for ......................................... Portion of KCCS.

A. Crop cultivation B. Allied activities C. Non Farm sector D. Only A & B

17. PAIS is applicable for KCC holder’s upto the age of ................. . Years.
A. 50 B. 60 C. 70 D. 80
18. Risk Coverage under PAIS Rs 50000 for death/permanent disability Rs.
.................. /- for partial disability-

A. 25000 B. 30000 C. 35000 D. 50000

19. Under Canara KOD sublimit for repayment of genuine Pvt. Debt

A. 1 LAKH B. 2 LAKH C. 3 LAKH D. 5 LAKH

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 112 | P a g e
 20. Minimum limit under Canara Kisan OD ..................... LAKH
A. 1 LAKH B. 2 LAKH C. 3 LAKH D. 5 LAKH
21. Maximum limit under CKOD........................................LAKH
A. 7.5 B. 10 C. 12.50 D. 15

22. Circle can permit higher limit up to Rs. 12.50 lakhs under CKOD at such of the designated
branches where the recovery percentage under the Scheme is above
............................. %

A. 80 B. 90 C. 75 D. 80
23. CKOD can be granted upto ___ times of Gross annual Income
A. 5 B. 2 C. 3 D. 4
24. CKOD can be granted to farmers with .................................. Year of satisfactory
record.
A. 1 B. 2 C. 3 D. 4
25. Maximum finance under JLG is Rs. ten lakh per group subject to ........................
per member.

A. 50000 B. 10000 0 C. 25000 D. 1500 00

26. Name the Death Cum Disability insurance scheme to all the Credit Linked Women
Self help Group members by the L I C Of India ................................................

Jan Shree Bima Yojna

27. The minimum and maximum number of members in a Micro credit group is
restricted to 3-5 in urban areas and .................. in rural and Semi urban areas.

A. 5 -1 0 B . 4- 6 C . 1 0- 15 D . 15- 20
28. Under Micro Credit group within 50000/- per member what may be the maximum
extent for Debt swapping............................... .

A. 10000 B. 15000 C. 25000 D. 30000

29. Scheme for tenant farmers, oral lessees, share croppers and farmers who have lands, but
do not have land records.

A. Kisan Seva B. Krishi Mitra C. Sampark Abhiyan D. Kisan Tatkal

30. Maximum limit of Kisan Mitra Credit Card- ....................................
A. 25000 B. 30000 c. 50000 D. 100000
31. Of the total limit granted under KMCC minimum ......................Percent should go to
Crop cultivation.

A. 20 B. 30 C. 40 D. 50
32. M a x i m u m q u a n t u m o f p r o d u c e l o a n p e r p a r t y , I n d i v i d u a l o r
Corporate ..................................... Lakh-

A. 20 B. 30 C. 40 D. 50
33. Minimum Limit under Kisan Tatkal
A. 1000 B. 5000 C. 10000 D. 25000
34. Maximum limit under Kisan Tatkal ...............
A. 25000 B. 50000 C. 100000 D. 500000
35. Kisan Tatkal can be given to existing KCC holders to the extent of............. % of KCC
or 25% of estimated annual income.

A. 25 B. 5 0 C. 75 D . 100
36. M i n i m u m P e r e n n i a l l y i r r i g a t e d l a n d r e q u i r e m e n t f o r f i n a n c i n g
Tractor .................... acre.

A. 2 B. 4 C. 6 D. 12
37. Name the single shot term loan limit to farmers for all term loan requirement for 2 3
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 113 | P a g e
 years ......

Kisan All purpose Term Loan

38. What is the maximum quantum of WC limit permissible under Smart Machines --
A. 25000 B. 50000 C. 100000 D. 500000
39. Which of the following is a scheme for Fishermen .......................

A. Matasya Suraksha B. Matasya Parirakshan C. Matasya Samruddhi D. Canara Machhuara

40. Maximum quantum of loan under Matasya Parirakshan............................
A. 5000 B. 10000 C. 50000 D. 100000
41. NABARD is providing an incentive of .................. Rs. per JLG TO BANK FOR
FORMING, NURTURING AND financing JLG on annual basis over a period of three years.
1000, B. 2000 C. 5000 D. 10000
42. What is the total per member total premium under Janshree Bima Yojna-

A. 50 B. 100 C. 200 D. 500

43. Gold loan for agriculture purpose, Land record is required for agreegate limit
above Rs .............

A. 50000/- B. 100000/- C. 300000/- D. 500000/-

44. Maximum quantum under Smart Machines including Working Capital Assistance- A. 5 lakh
B. 5.5 lakh C. 7 Lakh D. 7.5 Lakh
45. Maximum loan which can be granted under Debt swapping scheme- A.
25000/- B. 50000/- C. 100000/- C. 200000/-
46. Minimum loan which can be granted to Fisherwomen under Matasya Parirakshan- A. 500/-
B. 1000/- C. 5000/- D. 10000/-
47. Annual assistance extended by NABARD to Farmers Club for first three years- A. 3000/-
B. 5000/- C. 10000/- D. 25000/-
48. Maximum debt swapping loan component under Canara Kisan OD:- A. 1
Lakh B. 0.5 Lakh C. 7.5 Lakh, D. 12.5 Lakh

49. The KCC limit for 2nd& subsequent years to be sanctioned on which of the following
basis
a)1st year limit +10 % of limit for every successive year up to 3rd year

b) 1st year limit +10 % of limit for every successive year up to 5th year

c) 1st year limit +20 % of limit for every successive year up to 3rd year

d) 1st year limit +20 % of limit for every successive year up to 5th year

50. For tractor loan,farmers should have minimum of ________ acres of perennially
irrigated land or __________ acres of dry land.
a) 8 or 16 b) 6 or 12 c) 4 or 8 d) 8 or 16

6. RETAIL LENDING
In today's aggressive business environment, it is not enough for any bank to mere bolster its
book size. For survival, in the short and long run, it is also imperative to book profit in sufficient
quantum. Retail lending segment, a recent market phenomenon is an excellent avenue to
realize this twin objective of maintaining form and content in proper contour i.e. a reasonable
volume of business affording a decent measure of profit.
On the obverse side, the retail loans are simple to lend and easy to avail. They are lucrative
for the bankers and affordable for the fund users. The changing demographic set up with
higher level of disposable income, improved life style and increased consumerism provides
more potential borrowers for the banks to exploit. The delinquency rate is also believed to
be very low and manageable as these are essentially short term loans with built in
mechanism for repayment and comfort.
On the flip side, the factors that triggered this shift of focus by the banks, are the diminishing

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 114 | P a g e
 credit off-take by the Corporate sector, due to the emergence of other cheaper sources of funds,
availability of more deployable funds at the hands of the banks, shrinking margins from the
conventional loan portfolios, and erosion of value of assets and income due to increasing NPAs
to name a few.
Unbridled and hasty lending will eventually put the bank in deep trouble. Retail
loan sector is also fraught with its own inherent risks and repercussions, if no
proper mitigating and insulating mechanism is in place. Hence it is necessary to shun away from
reckless lending for the sake of immediate short term gains, and resort to prudent lending with
a vigilant approach, to insulate the bank against the risks associated with such types of loan
assets viz. Liquidity Risk, Interest Rate Risk, Regulatory Risk and Asset-Liability mismatch. It is
also necessary to identify the vulnerable aspects such as undue concentration in a particular
portfolio, frauds by way of impersonation, fabrication of false documents, KYC issues, etc.

Whatever the constraints and risks associated with this segment, it still provides an alluring
avenue to expand our clientele base and balance the risk and reward to our advantage. What is
needed is a controlled aggression with caution to be in the market place and make hay when
the climate is conducive as there is enormous scope for cross selling. Hence it is incumbent on
every staff member of the bank to exploit this potentially abundant and profitable segment to
help the bank manage the asset liability parity and to augment the income out of core
operation.
Retail Lending Norms

 A minimum of 70 % of total marks to be secured by the prospective borrower to

be eligible for loan under retail lending schemes. The rating sheets are applicable
for all retail lending loans other than, Canara Pension, Canara Trade, Canara
Rent, Canara Mortgage. Relaxation in the qualifying marks may be considered up
to a ceiling of 60% only by NHA.A minimum of 80% of total marks to be secured
by the prospective borrower to be eligible for recommending ROI concession.
 Cut-off limit for forwarding copies of application / credit report to CO enhanced to `5 lacs for
all branches including VLB / ELB
 RL loans are not subject to Mid term review.(Except Traders loans and Doctors choice)
irrespective of SA. Aggregation of liabilities/limits to be done for deciding the sanctioning
authority in case of sanction of second /subsequent loan
Retail Lending products

1. Canara Mortgage scheme

 Individual NRI with resident close relative of NRI as co borrower can avail the
finance against unencumbered, residential house / flat /commercial property,
vacant / partially tenanted property. Vacant land is not permissible. Third Party
property in name of close relative & spouse and owner of property is joining as
joint borrower can be permitted
 Margin requirement is 50 % of market value of property. If property is already
mortgaged to our Bank for any loan and sufficient margin is available for existing
loan as well as proposed Canara Mortgage loan Suitable Canara Mortgage limit
can be sanctioned by NHA
 NTH requirement. Repayment Period is 84 months (120 months by circle head CAC
 Processing Charges are 1% of loan amount ( 5000-50000) ,Documentation
Charges are Rs 100/- per lac ( 1000-25000 ) and inspection charges up to Rs 10
Lac loan are Rs 200 per inspection ( Max 600 ) .Inspection Charges above Rs 10
Lacs are Rs 300 per inspection ( or actual whichever is higher )
2. Canara Rent
 To meet business /personal needs against rent receivable up to 75 % of net rent
receivable for unexpired period of lease . Residential property can not be
accepted under Canara Rent Loan scheme. Circle head CAC authorities may
permit to accept the property leased out to non corporate also selectively in
respect of proposal falling upto their powers.
 Repayment period should not exceed unexpired lease period or 60 months
whichever is lower. Repayment period not exceeding 84 months may be
permitted by the respective sanctioning authority.
 ROI for PSUs and Navratna Cos areMCLR+ 2.50 % and general companies areMCLR+2.75 %
 Processing Charges in canara rent scheme is 0.5 % of loan amount ( 5000-50000
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 115 | P a g e
 ) and Documentation Charges are Rs 100 per Lac ( 1000-25000 )
3. Canara Yuva Awas Rin
 Eligible customers must be aged between 21-45 Year having 2 years of
confirmed service can be granted Housing loan upto 5 years gross salary with
30 % NTH requirement ( min Rs 10000/-).Quantum for repairs and renovation
is 75 % of project cost (Max 15 lacs )
 Margin for loans up to Rs 75 Lacs is 20 % and above Rs 75 Lacs is 25 % .40 %
Margin is required in case if borrower opt to capitalize the pre- EMI interest
during repayment holiday
 ROI up to Rs 100 lacs →MCLR,above Rs100 Lacs →MCLR+ .10 %
 Moratorium period of 20 months can be permitted in case of completed flats
/ready build house/ takeover and in case of construction maximum 36 months
of repayment holiday is permitted with or without Pre – EMI interest
capitalization.
4. Housing Loan to NRI
 21-60 years aged individual having NRI status for 3 years and employment
abroad for 2 Years can be granted housing loan up to 4 years of gross annual
income with NTH 40 %
 Moratorium period of 2 months can be permitted in case of completed flats
/ready build house/ takeover , 12 months months in case of purchase of semi
finished /old house /finishing /modification /repair of the house and in case of
construction maximum 36 months of repayment holiday is permitted .
 ROI for loan up to Rs 100 lacs →MCLR,above Rs100 Lacs →MCLR+ .10 %
 Processing Charges are 0.1 % (500-10000) of loan amount.
5. Premium Housing Loan to HNIs
HNI having annual gross income Rs 25 Lacs & above can be granted housing loan up to 5 years of
gross annual income with minimum NTH 30 % . Minimum loan quantum is Rs 1 Crore .Loan amount
for purchase of plot is restricted to 60 % of total loan. Maximum age by which loan should be repaid
by salaried individual is Retirement age + 5 years and by non salaried individual is 70 years.
 Moratorium period of 2 months can be permitted in case of completed flats
/ready build house/ take over , 12 months in case of purchase of semi finished
/old house /finishing /modification /repair of the house and in case of
construction maximum 24 months of repayment holiday is permitted .In case of
loan for purchase of flat under construction NHA can permit 36 months
moratorium period .
 ROI isMCLR+0.1 % & Processing Charges are 0.1% of loan amount (max Rs 25000 )
6. Housing Loan to Agriculturists
 Hosuing loan to Agriculturists owing and cultivating agricultural land of more
than 5 acres of irrigated land / 10 acres of dry land and having satisfactory
dealing of 2 Years(selectively waived by Circle head CAC 563/14 ) can be
granted HL up to 4 years of annual gross income . Property must be situated in
Non agricultural residential area
 Margin for purchase of old house in case of loan amount exceed Rs 20 Lacs is 25 %
 Repayment 30 years or up to the age of 65 years of borrower in monthly /
Quarterly / Half Yearly /Annual EMI.
 ROI for loan up to Rs 100 lacs →MCLR,above Rs100 Lacs →MCLR+ .10 %
 Processing Charges are 0.5 % (500-10000) of loan amount.
7. Housing Loan to Senior Citizens
 Senior citizens above 60 years and upto 70 years jointly with surviving spouse
or with earning legal heir aged below 55 are eligible.
 HL to pensioners and salaried can be granted upto 50 times of monthly
pension / income or 4 times of average gross annual income in case of P &
SE persons with a maximum of Rs 75 lacs
 Repayment period including repayment holiday (1-18 months) is maximum 15
years or upto the age 75 years of borrower.
 Margin for purchase of old house in case of loan amount exceed Rs 20 Lacs is 25 %
 Processing Charges are 50 % of General Housing Loan.
8. Canara Vehicle – 4-wheeler loan
 Minimum gross salary /income is Rs 3 lacs, NTH 40 % with minimum RS 12000
p.m. CGM /GM HO CAC can relax NTH upto 25 % with a minimum of Rs 10000/-
in individual cases and also under special packages.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 116 | P a g e
  Margin for loan upto Rs 10 Lac is 10 % ,above Rs 10 Lac &up to Rs 25 Lac is 15
% and loan above Rs 25 Lacs is 20 % .Margin for pre owned vehicle is 25 % and
maximum loan is Rs 15 Lac
 Repayment for new and old vehicle finance are 84 months and 60 months respectively.
 Ineligible entity for Canara Vehicle loan is HUF
 Processing Charges are 0.25 %( 1000-5000) of loan amount.
 Incentive to dealer and sales executive of dealer are 1 % of loan amount &Rs 1000/- to
sales executive
 During the pendency of first loan finance for second vehicle can be permitted by
NHA and finance to third vehicle can be permitted by Circle head CAC
 ROI for Men → BR+0.30 % , Women →MCLR+ 0.25 %
 Delegation of Power : S/M/LMCLR→5/10/20 Lacs , CM-VLB/DM –CO-CAC →40
Lacs, AGM-ELB/COCAC : 100 lacs, DGM BR/CO CAC →600 Lacs , CGM/GM CO
CAC →3000 lacs CGM/GM HO CAC →4000 lacs
9. Canara Budget Scheme
 NTH after EMI of proposed loan should not be less than 40 % with a minimum of
Rs 10000 in all cases. Non salaried class not eligible. Salaried class can be
financed upto from 6-10 months gross salary
Under special package and under individual cases CGM /GM HO CAC can relax NTH upto 25 % of
gross salary subject to minimum of Rs 7500/- .subject to maintenance of salary account or
registration of salary mandate.
Maximum repayment period is 60 months and can be relaxed to 72 months by CGM /GM HO CAC upto
their delegated power. Delegation of power restricted to Branches having NPA less than 3 % under
the scheme
 ROI : With salary mandate →BR+ 4 % , without salary mandate → BR+ 5 %
 Delegation of Power : S/M/L→ Rs 3 Lacs ( 6 months salary) , CM-VLB/DM –CO-
CAC →Rs 5 Lacs ( 10 months), AGM-ELB/CO-CAC : Rs 6 Lacs ( 10 months ),
DGM BR/CO CAC → Rs 8 Lacs ( 15 months) , CGM/GM CO CAC →10 Lacs ( 15
months) CGM/GM HO CAC →Above Rs 10 Lacs ( above 15 months )
10. Teachers’ loan
 Maximum loan that can be granted by S/M/L Branches under the scheme is 6
months gross salary subject to maximum of Rs 2 Lacs and by CM/ VLB, AGM
/ELB 10 month’s gross salary subject to Maximum of Rs 3 Lacs.
 NTH after EMI of proposed loan should not be less than 30 % with a minimum of Rs 10000/-
in all cases
 Under special package CGM /GM HO CAC can relax NTH upto 25 % of
gross salary subject to minimum of Rs 7500/-.
 Teachers’ loan is repayable in 48 EMI and can be relaxed upto 60 months by NHA
 ROI → BR+ 3.75 %

11. Vidya Turant Scheme

 Education loans to pursue higher studies in reputed institutions viz., I st level
IIMs/IITs/ NITs /IISc/ISB (Hyderabad). Other than the designated branches can
also sanction the loans under Vidya Turant Scheme ,upto the limits specified for
collateral free loan under the scheme
 Maximum limit of waiver of collateral security to vidya turant loan applicants
of IIT /IIM /NIT /IISC students are up to Rs 20 Lacs and ISB students are up
to Rs 30 Lacs
 Rate of interest in Vidya turant Loan is Base rate
 Braches to convey the sanction to applicant within 48 hours through E mail.
 Upfront / Processing charges under the scheme is Nil
 Repayment of loan upto Rs 7.5 Lacs is 10 years and of loan above Rs 7.5 Lacs is 15 years
 Entire loan is classified under Non Priority if loan amount exceeds Rs 10 Lacs

12. Pradhan Mantri Awas Yojana

 Operational till 31.03.2022
 It is for EWS/LIG beneficiaries residing in urban areas and to be implemented by
all semi-urban, urban and metro branches/RAHs
 Annual household income: EWS →upto Rs 2 Lacs, LIC → upto Rs 6 Lacs. For self
employed person affidavit can be obtained for annual income upto Rs 2.5 Lacs.
 Quantum: 4 times gross annual income with 40 % NTH. Maximum loan Rs 24 Lacs.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 117 | P a g e
  ROI : Base Rate , Repayment: 15 Years ( Max moratorium 18 months ) ,processing Charges
: Nil
 Credit linked interest subsidy of 6.5 % for 15 years or till tenure of loan
whichever is less. Claim of subsidy from NHB on quarterly intervals by RA Wing
HO.
 Carpet area for EWS is 30 sq mtr. And for LIG 60 Sq mtr (Built up area).
 Construction to be completed within 18 months to become eligible for interest
subsidy. The NPV of the interest subsidy will be calculated at a discount rate of 9
%.
 Age: 21-55 Years. If age is above 50 years, the major legal heir to join the loan.
The house should be in the name of female head or joint name of male head and
his wife. If there are no adult female members, house can be in the name of
male member.
Delegation for HL : S/M/L →10/15/30 Lacs , Credit manager in VLB/ELB → Rs 15 Lacs , Sr manager
in VLB/ELB → Rs 30 Lacs CM-VLB/DM –CO-CAC →50 Lacs, AGM-ELB/CO-CAC : 100 lacs, DGM CO CAC
→200 Lacs ( 133 % security) , CGM/GM CO CAC →300 lacs ( 133 % security) CGM/GM HO CAC →300
lacs with 133 % security in respect of DGM headed circle and Rs 500 Lacs with 150 % security , ED
CAC above Rs 500 Lacs with 150 % security.

CIBIL & CIR

CREDIT INFORMATION REPORTS (CIRs) (Ref.Cir. - 560/2015)
Credit Information Companies apart from CIBIL(http://www.cibil.com):
a) M/s CRIF High Mark Credit Information Services Pvt Ltd ( CRIF)
b) M/s Equifax Credit Information Services Pvt Ltd ( ECIS)
c) M/s Experian Credit Information Company India Private Ltd. (ECICI)(www.experian.in)
Score of the Various Credit Information Companies.
CIBIL Equifax Experian CRIF Risk Risk Delegation*
Grade Description
900-750 900-742 900-800 750-720 CS : 1 Low Risk RSA
750-700 742-719 799-700 720-694 CS : 2 Fair Risk RSA
700-650 719-708 699-600 694-664 CS : 3 Normal Risk RSA
650-590 708-674 599-550 664-652 CS : 4 Moderat Upto DGM
e Risk CO-NHA
Circle head CAC-
RSA
less than less than less less than CS : 5 High Risk Circle Head &
590 674 than 652 Above
CS = Credit Score 550
The credit scores are applicable for consumer segments only. Exemptions from drawing
CIR : - Loans against our own Deposit - Staff Loans
*Delegation of power:
In case of the following though CIR is to be mandatorily obtained, respective sanctioning
Authority can consider the proposal irrespective of Risk Grade.
Renewal of existing facilities, Government Sponsored Schemes with aggregate loan quantum up to
Rs.2 lacs to a borrower; DRI Loans, CANARA Pension, Gold Loans, Agri-Loans upto and including Rs.
3.00 Lakh in aggregate to a borrower / individual. Fully Secured Loans (by Tangible Security) upto
and including Rs. 2.00 Lakh, under Non- Priority Sector in aggregate to a borrower / individual,
Education Loan
· In case of CIBIL, there are 3 scores viz., Trans-union Score Version 1, Trans-union Version 2 and
Personal Score. However, Trans-union Version 2 Score shall be reckoned.
· CIBIL has now made it compulsory to furnish DIN and PAN Nos. in respect of the Directors of all
Corporate accounts as a mandatory field. Since the data extracted from CBS data base for all the
branches will be sent to Credit Information Companies (CICs) and incomplete and poor quality of
data failing to meet the requirements of CICs are liable for rejection, all the branches are hereby
instructed to obtain DIN and PAN Nos. of the Directors of the Corporate Accounts update the
same in the Master Data without fail. (628/2014)
· In case of variation in the scores of the applicant or Coapplicant, the lowest of the
three digit scores among all the CIRs obtained shall be taken as the basis for assigning
risk grade.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 118 | P a g e
CREDIT INFORMATION REPORTS (CIRs)
· Wherever sufficiently long credit histories in respect of borrowers are not available, CICs are not
allotting three digit scores, but a two digit score or risk index is displayed in the report.
· In such cases, suitable credit decision shall be taken and loans shall be sanctioned based on the
normal credit sanctioning powers as detailed in HO Cir. 268/2014 dt.17.5.2014 based on merits.
· Further, in case CIR is not available, the processing section/branch may proceed with the
appraisal process duly mentioning the non availability of CIR details of the proposed borrower and
keep a record of such failure in CIR generation along with the loan papers. The credit
investigation in terms of extant guidelines shall continue to play an important role in verification
of bonafides/ Credit worthiness of the borrower/ applicant.
· For proprietorship concerns, branches/offices shall draw the CIR under Commercial Segment and
extant guidelines shall be adhered to. Further, in addition to CIR under Commercial Segment, CIR
for the proprietor in his individual capacity as beneficial owner shall be drawn under Consumer
Segment and the risk grade as proposed above shall be mentioned in the appraisal process.
Respective sanctioning authority shall take suitable credit decision in respect of the proprietorship
firm as applicable to commercial segment.

· The fee shall be recovered from the respective applicant at the time of processing the proposal
@Rs. 50- per report. In case of drawing two reports i.e. One from CIBIL and the second report
from other CICs Rs. 100/- shall be recovered from borrower. The fee collected will be credited to
General Charges- Misc. Since cost is borne by the customer so he is entitled for a copy of report
free of Cost.
· Criteria for Drawing CIR from multiple Credit Information Companies for Consumer segment
areas follows: (436/2015)
Sr. No. Particulars Report from One CIC Report from Two CIC
Limit Upto Limit above
I Secured Loans
Personal segment
i. Housing Loans 10 lacs 10lacs
ii Car Loans 5 lacs 5 lacs
iii. All other secured 5 lacs 5 lacs
loans including
Education loans.
b. MSME Se ment 10lacs 10lacs
c. Agri Segments 3 lacs 3 lacs
d. All other loans 10lacs 10 lacs
II Unsecured Loans
(a) Personal segment
i. Personal Loans 1 lacs 1 lacs
ii Education loans 4 lacs 4 lacs
iii. All other Loans 3 lacs 3 lacs
b. MSME Se ment 2 lacs 2 lacs
c. Agri Segment 1 lacs 1 lacs
d. All other loans 5 lacs 5 lacs
Reporting: Circle to submit consolidated report on CIRs drawn by the Branches for the loan
sanctioned during the quarter as per the format given in Annexure of cir 11/2016.
Credit Score to be considered in case loan is to be considered from Single Applicant : Branches /CO
shall draw two CIRs as per extant guidelines. Lower of the Three Digit Score amongst the CIRs
obtained shall be taken as the basis for assigning Risk Grade. (cir 11/2016). Reference Circulars on
CIBIL & CIR : 234/2009,(67,83,51/2010), 28/2011,( 33,534/2013), ( 380, 399, 436, 497,576/2014),
560/2015 & 11/2016

TEST YOURSELF : RETAIL LENDING

1. Minimum marks required for being eligible for Retail loan

a.70 b.45 c. 40 d. 80 e. 30
2. Canara Jeevan- Reverse mortgage loan is for

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 119 | P a g e
a.Farmers b. Senior citizens c.Traders d. Employees
3. Under Canara Vehicle scheme minimum net take home after proposed installment should not
be less than
a)25% or Rs 12000/- whichever is higher b) 25% or Rs 12000/- whichever is lower c) 25% or
Rs 10000/- whichever is higher d) 25% or Rs 10000/- whichever is lower
e) 40%
4. For availing Canara Vehicle (4 wheeler) eligibility for non salaried is:
a) Gross annual income Rs 3 lacs p.a b) 3 years Gross Average Annual Income of not less
than Rs. 3 lakhs c) 3 years Gross Average Annual Income of not less than Rs. 2.50 lakhs d) a)&b) e)
a)&c)
5. Payment of Service Charges to Automobile Dealers and their Sales Executives for
sourcing Car Loan Applications:
a) 1.30% of Loan Amount to Car Dealers with a maximum cap of Rs. 50,000/-. b) 1% of loan
amount to Car Dealers without cap of maximum c) Rs. 1,500/- to Dealer’s Sales Executives for
Sanctioned Proposals. d) a)&c) e) b)&c)
6. Which of the following may be the eligibility criteria for determining quantum (subject
to documentary evidence) under Canara Vehicle:
a) conveyance allowance b) income earned by the spouse c) rental income d) income
from investment e) All the above
7. Under Canara Vehicle ‘New vehicle’ is :
a) First purchase from the dealer b) Vehicle not older than 1 month irrespective of the number
of transfers c) Borrower should be the first transferee
d) Vehicle not older than 1month but our borrower is the first transferee e) Only a)
8. Other than Retail lending loans Credit report copies need to be sent to CO for limits
above
a) Rs.10000 b) Rs.25000 c) Rs.50000 d) Rs.1lakh e )None of the above
9. For calculating the LTV ratio which two factors of the following are required?
(a)Principal Amount (b) Outstanding liability including accrued interest &other charges (c) Original
value of property (d)Present Market value of property
10. Which product under Retail Loan cannot be classified under priority sector
Classification?
a)Canara Jeevan b)Housing Loan c)Education Loan d)Canara Trade e)Doctors Choice
11. Name the scheme for financing studies
a) VidyaChandra b) VidyaSurya c) Vidyasagar d) Vidwan e) None oftheabove
12. Name theRetail Lending Scheme for financing Rent Receivables
a) Canaramortgage b) Canara rent c) Canara budget d) Canarapension Jnanaganga
13. Maximum loan permissible under CANARATRADE
a. Rs.50Crores b. Rs.25 Crores c. Rs.10 Crores d. Rs.5Crores
14. Maximum loan permissible under CANARAGUIDE is
a. Rs.1lakh b. Rs.90,000 c. Rs.60,000 d. Rs.50,000
15. Canara Guide is a loan scheme for
a. Students b.Teachers c.TaxReturn Preparers d. Employees of the Bank
16. Maximum Eligible amount under VIDYA SAHAY Scheme would be initial payment as
proposed by the CET Authorities or Rs. whichever is less
a.1 Lakh b. 2 Lakhs c. 3 lakhs d. 4 lakhs
17. Loan scheme meant for purchase of books by Staff Members
a) Canara Budget b) Gnanaganga c) Canara Pension d) None of the above
18. Proposals under Educational Loan can be rejected by
a. Branch with concurrence of Next Higher authority b. Next Higher Authority c. General
Manager d. Executive Director e. CMD
19. What is the ceiling for Working Capital in Doctor’s Choice loans?
a) Rs.50lacs b) Rs.100lacs c) Rs.150 lacs d) Rs.200lacs e) Rs.500lacs
20. What is the maximum loan amount in Doctor’s choice
a) Rs.400lacs b) Rs.250lacs c) Rs.100lacs d) Rs.500lacs e) Rs 1000Lacs
21. What is the maximum repayment holiday in case of construction of house?
a) 12 months b) 18 months c) 24months d) 30 months e) 36months
22. What is the minimum loan amount in Swarna loans?
a) Rs.1,000 b) Rs.5,000 c) Rs.7,500 d) Rs.10,000 e) Rs 15000
23. Permitted payment of Service Charges to approved Builders or their authorized
Marketing Officials: % of the Housing Loan amount,
Maximum Rs. per loan sanctioned
a) 0.20%, 50000/- b)0.25% , 50000/- c)0.25%, 1 Cr d) 0.20%, 1Cr
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 120 | P a g e
 24. Eligible quantum under YUVA AWAS RIN:
a)6 years Gross salary b) 5 years Gross salary c) 4 years Gross salary d) 3 years Gross salary e)b) or
c) as per delegation of power
25. Housing Loan to Staff under RBI Housing Loan Scheme: Total deductions including
repayment towards proposed Housing Loan shall not exceed of gross salary.
a) 35% b) 65% c)40% d)60% e) 25%
26. CANARA MORTGAGE: Net Take Home :
a) 40% with a minimum of Rs. 20,000/- p.m. b) 25% with a minimum of Rs. 20,000/- p.m. c)
20% with a minimum of Rs. 20,000/- p.m.
d) 20% with a minimum of Rs. 10,000/- p.m.
27. CANARA BUDGET: Net take home–
a) 25% with a minimum of Rs.10,000/-p.m. b) 20% or Rs 7500/- by CGM/GM-HO-CAC and
higher authorities c) 20% with a minimum of Rs. 10,000/- p.m.
d) a) &b e)a)& c
28. Switch over fee for Repricing of Housing Loans:
a) 1% of the outstanding liability along with applicable service tax b) 1% of the outstanding
liability c) 2% of the outstanding liability d) 2% of the outstanding liability along with applicable
service tax
29. Foreclosure charges/ Prepayment penalties in case of all floating rate term loans
sanctioned to individual borrowers :
a) 1% b) 2% c) 1.5% d) 2.5% e) none
30. On receipt of application through Online Loan Application and Status Tracking System (
OLTS), contact the applicants immediately and
Process the applications expeditiously (within hours).
a)24 hrs b) 48hrs c) 64 hrs d) 10 hrs
31. As per BCSBI codes for compliance branches should return all the securities/documents
within days of repayment of all dues to customers.
a) 10 days b) 15 days c) 21 days d)20 days
32. The time norms stipulated for Housing Loans upto Rs. 25 lacs Sanctioned at Branch/
RAH -
a) 21 days b) 45 days c) 30 days d) 7 days
33. The time norms stipulated for Housing Loans above Rs. 25 lacs Sanctioned at Branch/
RAH -
a) 21 days b) 45 days c) 30 days d) 7 days
34. The time norms stipulated for Vehicle Loans upto Rs. 25 lacs Sanctioned at Branch/
RAH -
a) 21 days b) 45 days c) 30 days d) 7 days
35. Circle Head CAC to sanction Housing Loans on lease hold properties upto their
delegated powers in cases where original unexpired lease period is:
a) less than the Housing Loan repayment period, b) Unexpired period of lease is 5 years & above
c) Lessor is Govt. Authority. d) Lease is automatically renewable e) All the above
36. VIDYA TURANT EDUCATION LOAN is sanction for
a) for students pursing studies in IIMs/IIts/NITs/IISc/ISB b) vocational courses only c)
skill development courses only d) down payment to CET/Counselling at the time of selection
e) for abroad studies only
37. VIDHYA SAHAY Bridge Loan is meant for
a) for students pursing studies in IIMs/IIts/NITs/IISc/ISB b) vocational courses only c)
skill development courses only d) down payment to CET/Counselling at the time of selection
e) for abroad studies only
38. Maximum age of the borrower at the time of availing the loan under Yuva Awas Rin
a) 70 years b) 65 years c)45 years d) 21 years e) 60years
39. YUVA AWAS RIN is a loan product meant for
a. senior citizens b students c salaried youth d young agriculturist e children of our staff
40. Minimum loan that can be granted under Premium Housing loan to High Networth
Individual is
a) Rs 50 lacs b) Rs 100 lacs c) Rs 150lacs d) Rs 200 lacs e)none of the above
41. Premium Housing loan to High Networth Individual can be given only if gross annual
income is
a) above Rs 5 lacs b)above Rs 10 lacs c) above Rs 15lacs d) above Rs 20 lacs e) above Rs 25 lacs
42. Financial support by Bank under Skilling loan scheme is provided after
a) after 8th Class , b) after 10th Class C) after 12th Class d) after graduation e) no such Bar
43. Insurance cover under canara consumer loan is
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 121 | P a g e
a) Waived upto Rs.50000/- b) Waived upto Rs.25000/- c) Waived upto Rs.100000/- d)Waived
irrespective of the quantum of loan e) None of above.
44. Housing loan for the agriculturist can not be considered for
a) Purchase of a ready built house / flat. b) Construction of house / flat. c) Purchase of a
site and construction of a house thereon. d) Purchase of land only e) For taking over of the
HL liability from commercial banks
45. Under Housing loan for the agriculturist scheme eligibility for Agriculturists in Dairy
farming, Poultry farming, Plantation Crops and Horticultural produce-
a) minimum gross annual income is Rs.5.00 Lakhs b) Agricultural lands of more than 5
acres (Irrigated lands) / 10 acres of Dry lands ; c) Age: < 55 years at the time of availing the
loan d)a & c e) A,b&c
46. Under Canara Cash Maximum loan quantum is Rs. lacs wherever De-mat
accounts are maintained at our DPs. or Rs.____ lacs in physical form
a) 20 , 10 b) 10,20 c) no maximum
47. During the currency/of the canara cash loan / limit, part release /
substitution of securities should not be permitted for more than : a) 5 occasions b) 10 occasions c) 15
occasions d) 20 occasions
48. For expansion, upgradation & creation of additional amenities, the maximum loan
amount under housing loan :
a.3 years gross salary or Rs.5 lacs b.75 % of the cost c.75 % of the cost or Rs.7.5 lacs whichever is
lower d.upto 75% of the project cost upto delegated powers under HL
49. Maximum repayment period and permissible age for availing housing loan?
a. 10 years, 70 yearsb. 15 years, 70 years c. 20 years, 70 years d. 30 years, 70 years
50. Repayment of loan under Housing Finance Scheme beyond 55 years of age can be
permitted by :
a. Circle Head only b. by the DGM c. Respective Sanctioning authority d. by the Branch
Manager
51. Housing Loan is classified as priority in metropolitan centres (with population of 10 lakh
and above):
a) up to Rs 28 lakh b) overall cost should not exceed 35 lakh c) banks’ own employees will be
excluded d) All the above
52. Loans for repairs (dwelling units of families) will be classified as priority up to Rs
lakh in metropolitan centres and up to Rs lakh in other centres.
a) 5, 2 b) 10, 5 c) 15, 20 d) none
53. Loans by banks for housing projects for economically weaker sections and low income
groups, the total cost of which does not exceed Rs -
lakh per dwelling unit is classified as priority.
a) 5 lacs b) 10lacs c)15 lacs d)20 lacs
54. Maximum repayment period and permissible age for availing housing loan?
a. 10 years, 70 yearsb. 15 years, 70 years c. 20 years, 70 years d. 30 years, 70 years
55. Under Housing loan cases where project cost exceeds Rs. 10.00 Lacs,
the margin shall be stipulated on the basic Project Cost : (which is true)
a) Stamp duty, registration charges, documentation charges may also be included. b) Stamp
duty, registration charges alone to be included. c) Stamp duty, registration charges,
documentation charges are to be excluded d) May be relaxed by next higher authority.
56. Under Dr. Ambedkar Central Sector Scheme of Interest Subsidy on
Educational Loans for Overseas Studies for Other Backward Classes(OBCs) & Economically backward
Classes(EBCs)- (ACSISOBCEBC), the total income from all sources of the Student borrower or his/her
parents/guardian for OBC:
a)shall not exceed Rs.5.00 lakh per annum b) shall not exceed Rs.3.00 lakh per annum c)
shall not exceed Rs.2.00 lakh per annum d) shall not exceed Rs.1.00 lakh per annum
57. Total income from all sources of the Student borrower or his/her parents/guardian
Under Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas
Studies for Other Backward Classes(OBCs) & Economically backward Classes(EBCs) shall not exceed :
a) Rs.1.00 lakh per annum for OBC Rs.2.00 lakh per annum for EBC. b) Rs.2.00 lakh per annum
for OBC Rs.1.00 lakh per annum for EBC
c) Rs.3.00 lakh per annum for OBC Rs.1.00 lakh per annum for EBC d) Rs.3.00 lakh per annum
for OBC Rs.2.00 lakh per annum for EBC
58. Under Housing Loan the loan amount for purchase of plot to be restricted
to of eligible/sanctioned loan amount . a) 30% b) 40% c) 50% d) 60%
59. In case of Repairs & Renovations, Expansion of existing unit,Upgradation and creation
of additional ameinities, margin to be stipulated is:
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 122 | P a g e
a) 40% b)20% c)25% d) 10%
60. LTV ratio to be maintained in case of housing loan upto 20 lacs
a) 90% b) 80% c) 75% d) 60%
61. Under vidhya turant collateral free loan for a student admitted to IIMs:
a) 20lacs b) 25lacs c)30 lacs d)no limit
62. Under PRADHAN MANTRI AWAS YOJANA (PMAY), Interest subsidy is available at the rate of
%for a period of 15 years or till tenure of the loan whichever is lower, for first Rs. loan
only.
a) 6.5%, 6 lakh b) 6.5%, 5 lakh c) 5%, 6 lakh d) 5%, 10 lakh
63. Under Education Loans expenses other than tuition fees, should not exceed ____ % of
the total cost of the course.
a) 10 b) 20 c) 30 d) 50
64.Credit Risk Guarantee Fund Trust for Low Income Housing ( CRGFTLIH ) Scheme of
National Housing Bank: Extent of Guarantee cover Up to Rs.2 lakh:
a) 90% of the amount in default subject to the ceiling of 90% of the sanctioned housing loan
amount
b) 85% of the amount in default subject to ceiling of 85% of the sanctioned housing loan amount
65. % risk weight is assigned for the portion of exposure guaranteed by CRGFTLIH.
a)10% b) 20% c) 75% d) 0%
66. The maximum permissible quantum of loan under Canara rent :
a. 75% of gross monthly rent receivables for the unexpired period of lease less TDS and advance
rent b.60% of gross monthly rent receivables for the unexpired certain period of lease less TDS and
advance rent c. 60% of gross monthly rent receivables for the unexpired certain period d.
ED & CMD can permit 85%
e. a&d
67. Canara Motgage: maximum loan that can be granted
a) 50% on the value of the property proposed to be offered as security b) Max Rs. 10.00 Crores
c) Max 5 Crores d) A&b e) A&c
68. Canara Motgage Eligibility:
a) Individual Customers having satisfactory dealings with our Bank. b) Non customers with
satisfactory OPL/market report c) NRI customers, with resident close relatives of NRI customer as
co-borrowers d) Companies/Firms/Business establishments /Trusts/HUFs e) A,b&c.
69. Canara Mortgage loan can be considered against the mortgage of: (incorrect)
a) EMT of un-encumbered residential house/ flat/ commercial property in the name and possession of
the borrower b)Loan against vacant land
c) Loans against Lease hold properties where lessor is Govt. authority d)Third party property only
in the name of close relatives & spouse as a joint borrower.
70. Canara Mortgage is a secured Term loan to individuals for non business purpose (but
not for speculative purposes) is granted against mortgage of land and building. What shall be the
Value of such land and building-
A. 133%, B. 125%, C. 200% D. No such non business purpose loan shall be granted.
71.Maximum repayment permitted under Swarna Loan Scheme is months from the date
of sanction as bullet payment along with interest
a.30 months b. 24 months c. 12 months d. 9 months
72. SKILLING LOAN: Credit facilities sanctioned are to be availed within ____months failing
which, the limits will automatically stand cancelled.
a) 1 b) 3 c) 6
73. SKILLING LOAN: Credit gurantee cover from National Credit Guarantee Trust Company
Ltd (NCGTC)- credit guarantee cover will be for a maximum of % of the outstanding loan amount
a)90% b)85% c)75% d)60%
74. Skilling loan- Minimum Qualification: student should have completed standard
a) No criteria b) 5th c)10th d)12th
75. Skilling loan: Quantum of Finance under the scheme ranges between is Rs 5000.00 to
Rs
a) 1.50lakhs b)1 lakhs c) 50,000 d) no maximum amount
76. Canara Trade - tenability of the limit that can be permitted
a)2 years subject to the annual review b)one year only c.)three years d)5 years
77. Service area norms applicable for sanction of Education loans :
a. Only in rural and semi urban areas b. In metropolitan cities c. Not applicable d.
May be waived by next higher authority
78. Concession in rate of interest for EL sanctioned at present for girl students is
a. 1% b. 0.5% c. No concession d. 2%
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 123 | P a g e
 79. Maximum no. of children from the same family to whom EL can be granted is
a. 2 b. 3 c. No maximum limit d. Subject to permission by higher authority
80. Aggregation of liabilities/limits to be done for deciding the sanctioning authority in case
of sanction of second/subsequent loan under the same Retail Lending scheme. True/False
81. SWARNA LOAN: Maintain LTV ratio of % during the entire loan period.
a) 50% b) 75% c)85% d) 90%
82. HOUSING LOAN SCHEME FOR SENIOR CITIZENS- Quantum -50 times of monthly pension/income
or 4 times average gross annual income max Rs s.t maintenance of 50% NTH
a)50 lacs b)75 lacs c) 100lacs
83. CIBIL report NOT mandatory for:
a) Salary credit account b) Canara Pension c)Education Loan d) Loan against our own
deposits/approved securities
84. Individual Housing Loans upto Rs 30 lakhs where LTV ratio >=80% Risk weight =
a)35% b)50% c)75% d)100% 85. Under CANARA PENSION Repayment is EMI if age is below 65
years.
a)48 b) 60 c) 72 d)84
86. CANARA JEEVAN - Equity To Value Ratio (EVR) should not at any time during the tenor of loan,
fall below :
a)10% b)15% c)20%
87. CENTRAL SCHEME OF INTEREST SUBSIDY FOR EDUCATIONALLOANS Economically Weaker
Sections and whose parental income upto Rs___
a)4.5 lakhs p.a b) 3.5 lakhs p.a c) 2.5 lakhs p.a d) 3 lakhs p.a
88. Minimum ____ % of the Education loan amounts sanctioned should be to the students coming
from rural areas as per Damodaran Committee recommendations.
a) 10% b) 20% c)30% d)40%
89. What shall be the Maximum quantum of loan to professional and self employee under Canara
Budget-
A. 50% of latest GAI B. 50% of last three years average GAI. C. Shall not be considered under
Canara Budget. D. Discretion of Sanctioning authority subject to 40% NTH.
90. Which one of the following is an Insurance scheme for Education loans-
A. Vidya Suraksha B. Canara Sahayata C. Vidya Sahay D. Vidya Turant
91. Repayment of Housing loan to Sr. Citizens including repayment holiday shall be 15 years
subject to maximum age of .................
A. 70 yrs. B 75 yrs. C. 80 yrs D. 85 yrs.
92. Under Canara Vehicle Scheme old vehicles (not more than 5 yrs) shall be financed to the
extent of 75% of assessed value/purchase value/price agreed subject to maximum-
A. 5 Lakhs, B. 10 Lakhs, C. 15 Lakhs, D. 25 Lakhs,
93. Canara site for purchase of housing sites from government body may be granted Upto
times of Gross salary/income.
A. 2, B. 3, C. 4, D. 5
94. Interest subvention is available for housing loans upto an amount of Rs ., subject to the
project cost not exceeding Rs. .
a) 15 lacs, 25 lacs b) 10lacs , 2 0 lacs c) 28lacs, 35 lacs
95. Canara Home Loan Plus: maximum LTV ratio shall not be more than
a) 75% b) 70% c)60% d) 90%
96. CANARA HOME LOAN PLUS: gap between two valuations : a)minimum 3 yrs b) minimum 2
years c)not reuired
97. Education loan: Persons staying in a rented house for a minimum period of years in a place
without owning a house in the present place of stay may also be treated as a permanent resident of
the place. 47/2012 -
a)5 yrs b)3 yrs c) 2 yrs d) 1yrs
98. Central Sector Scheme of Interest Subsidy on Education Loans: The claims are valid in all the
eligible cases which complies the followings;
• The loans are availed only for
• Parental Income should not be more than Rs.
a) Inland studies, Rs 4.5 lacs p.a. b)abroad , Rs 4.5 lacs pa C) Inland studies, Rs 3 lacs d)
abroad studies, 3 lacs
99. Reimbursement under housing loan should not exceeding of the loan amount. Reimbursement
to be claimed within months from the date of incurring the
expenditure.
a)25%, 6mths b) 25%, 4 mths c) 25%, 3 mnths d) 25% 2 mnths
100. While computing risk grade under CIBIL if there is variation in the scores of the applicant or
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 124 | P a g e
 Coapplicant, the of the three digit scores among all the CIRs obtained shall be taken as the basis
for assigning risk grade
a) Lowest b)highest of the lower two c) highest

ANSWER
QUES. QUES. QUES. QUES.
NO. ANSWERS NO. ANSWERS NO. ANSWERS NO. ANSWERS
1 A 26 C 51 D 76 A
2 B 27 D 52 A 77 C
3 A 28 A 53 B 78 B
4 E 29 E 54 D 79 C
5 D 30 B 55 C 80 TRUE
6 E 31 B 56 B 81 B
7 D 32 A 57 C 82 B
8 D 33 C 58 D 83 D
9 B&D 34 D 59 C 84 A
10 A 35 E 60 A 85 B
11 C 36 A 61 C 86 A
12 B 37 D 62 A 87 A
13 C 38 C 63 D 88 C
14 C 39 C 64 A 89 C
15 C 40 B 65 D 90 A
16 A 41 E 66 E 91 B
17 A 42 B 67 D 92 C
18 A 43 D 68 E 93 B
19 A 44 D 69 B 94 A
20 D 45 D 70 C 95 A
21 B 46 A 71 C 96 B
22 D 47 B 72 C 97 C
23 B 48 D 73 C 98 A
24 A 49 D 74 C 99 C
25 B 50 A 75 A 100 A

7. FINANCIAL STATEMENT / BALANCE SHEET ANALYSIS

1. A Financial Statement is organized collection of information or data prepared as per certain acceptable
accounting norms & procedures. Financial statement mainly consists of Balance sheet (the position of
assets and liabilities as on particular date), Profit and loss account (the income and expenditure
statement for a Particular period), Funds flow statement & cash Flow statement.
2. Financial Statements : 3 stage process - Classification of assets and liabilities ( as per RBI
guidelines ),Calculation of financial ratios Interpretation of ratios.
3. Audited Balance sheet : For credit limit ( FB + NFB ) upto Rs. 20 lacs no ABS, only unaudited BS but
over Rs.20 lacs ABS is must but for Agril. Related loans no ABS upto Rs. 100 lacs & only above Rs.
100 lacs ABS in Agril. Credit ( FB + NFB ) is required. For company & other statutory body ABS
always required irrespective of Quantum of limit and similar in the case in business enterprises
where turn over is Rs. 100 lacs or more- ABS. Gross receipt of Profession exceeds Rs.25 lacs- ABS
required. As per IT rules Form 3CB & Form 3CD also required where ever it is applicable. In case of
sticky accounts S-3, a special audit report is required. Penal Interest of 2% on the outstanding
liability shall be collected if ABS is not submitted before 31st oct. every year ( within 07 month from
closing year ) or within a fortnight from the date of Audit of financial accounts of business unit which
ever is earlier.
Terms used inFinancial statement analysis

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1 Net Sales Gross Sales minus returns, discounts, excise duty.
2 Raw Materials consumed Opening Stock of raw materials plus purchases of raw materials less
Dosing stock of raw material .
3 Cost of Production Raw materials consumed, stores and spares consumed, power and
fuel, direct labour, repairs and maintenance, other manufacturing
expenses and depredation plus opening stock of stock in process
minus dosing stock of stock in process.
4 Cost of Sales Cost of production (3) plus opening stock of finished goods minus
dosing stock of finished goods.
5 Gross Profit Net Sales - Cost of Sales (Item 1 minus Item 1)
Gross Profit (5) minus interest, selling general and administrative
6 Operating Profit
expenses.
7 Net Prokbefore tax Operating profit plus other incomes minus other expenses

8 Net Profit after tax Profit before taxation minus provision for taxes.
9 Retained Profit Net profit minus dividend paid / dedared
10 Cash Profit Profit before charging Depreciation (Net Profit + Depredation)
11 Cash-Loss Loss before charging Depredation (Net Loss — Depredation)
_12 Assets Things owned by a business Not converted into cash in normal course
13 Fixed Assets of business, These are acquired to use them in the production of
. other goods and services.
14 Current Assets Assets which are meant to be converted into cash or consumed in
normal course of business say within 1 year. These are also called as
gross working capital.
15 Intangible Assets . Expenditure on invisible assets, likely to yield benefit to the company
in future e.g. goodwill, patent, trade marks, designs.

16 Fictitious Assets Which have notional value only e.g. losses, preliminary expenses.
17 Miscellaneous Assets or Non Which can't be classified as current, fixed or intangible e.g. inter
current assets Corporate investment
18 Tangible Assets Total asset side of balance sheet minus intangible assets.
19 Quick Assets Assets which can be converted to cash quickly. Cash, bank balances,
marketable investments, bills receivables and sundry debtors
considered goal. (Current Assets minus-Inventories & Prepaid
Expenses)
20 Liabilities Thin s owed by the business.
21 Owners Equity Paid up share capital, reserves and surplus, preference shares with
(Net Worth) more than 12 years maturity.
22 Long term liabilities or Debt Outsiders funds, payable in more than 12 months. Term loan
(exduding instalment payable within 12 months) plus debentures
maturing within more than one year, preference shares redeemable
within 12years, deposits payable beyond one year.
23 Current Liabilities Liabilities which are payable in less than one year e.g. sundry
creditors, unsecured loans, advances from customers, interest
accrued but not due, dividends payable, statutory liabilities,
provisions, Bank borrowings for working capital etc

24 Total Outside Liabilities Total of the liability side of balance sheet minus net worth
25 Tangible Net Worth Total tangible assets minus total outside liabilities. Owner's funds
minus Intangible & Fictitious assets ; Paid up capital plus reserves
minus intangible assets
26 Gross Working Capital Total of Current Assets
27 Net Working Capital Current assets minus total current liabilities. Long Term Sources
minus long term uses
28 Working Capital gap Current Assets minus current liabilities other than Bank Borrowings.

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29 Long term sources Paid up capital, reserves and surplus (excluding specific reserves) i.e.
Net Worth and long term liabilities.
30 Short Term Sources Current Liabilities
31 Long Term Uses Fixed Assets, Miscellaneous or Non. current assets, Intangible and
Fictitious Assets (assets other than current assets)
32 Short Term Uses Current Assets
33 Contingent Liabilities Likely liability which may or may not arise on the happening or non
happening of an event
(i) As per RBI guidelines, installments of term loans due within 12 months are not to be
treated as current liability for calculation of Net Working Capital and Working Capital
Gap. (ii) Overdue instalments and Interest on term loan is treated as current liability.
(iii) Sundry Debtors/ Book debts older than 6 months are treated as Non current assets.
(iv) Loans from friends and relations are normally treated as Long term liability but if
these are secured by Demand Promissory Note i.e. payable on demand then the same
should be treated as Current Liability. (v)Reserves except which are in the nature of
provisions like Depreciation Reserve are part of net worth.

Liabilities Assets
Net worth/Equity Funds brought in by the Fixed Assets :Assets which are purchased for long
promoters as their investment in business or term and not meant to be sold but used for
generated by and retained in business production.
Share capital/partner's capital/ Paid up Land & Building,Plant & Machinery
equity share capital,/owners funds Vehicles,Furniture & Fixture
Reserves & Surplus e.g. General Reserve, Office equipment,Capital Work in Progress These
Capital Reserve, Revaluation Reserve and are represented as under:
Other Reserves),Retained Earnings Original value (Gross Bock) Less depreciation
Undistributed Profits,Preference share capital Net Block or book value or written down
(not redeemable within 12 years) Value Method

Long term liabilities: Non Current Assets:

Liabilities which are not due for payment Assets which cannot be classified as current or
within 12 months from the date of the fixed or intangible assets Book Debts or Sundry
Balance Sheet) Debtors more than 6 months old/ Disputed Debts,
Term loans from financial institutions; Investment of long term nature in shares,
Term loan from banks; Debentures/Bonds; govt. securities, associates or sister firms or
Deferred payment liability;Preference Shares companies. Long term security deposits. Unquoted
redeemable within 12 years; investments; Investments in subsidiaries or sister
Fixed Deposits maturing after one year; concerns; Loans & Advances to directors, officers;
Provision for gratuity; Unsecured Loans Accounts receivables in respect of sale of plant &
machinery; Advances to concerns in which
directors are interested; Deposits with customs
port trust etc
Intangible & fictitious Assets Which do not have
physical existence. For example: Goodwill, Patents,
Trade Mark, Copy Right, Preliminary or pre
operative expenses, other formation expenses,
debit balance of P & L account, accumulated
losses, bad debts, Capital issue expenses e.g.
discount on issue of share & debentures,
commission on underwriting of shares &
debentures; Deferred revenue expenditure
e.g. Advertisement

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 127 | P a g e
 Short term for CurrentyLiabilities Liabilities Current Assets : Cash in hand, Bank balance
which are due for payment within 12 months including fixed ,deposits with banks.
from the date of the balance sheet and are to Stocks/inventory (such as raw material, stock in
be repaid out of proceeds of current process, finished goods, consumable stores and
assets,Short term borrowings from banks spares),Book debts/Sundry debtors/Bills
(C/C, 0/D or B/P, B/D limits) for working Receivable/ Accounts receivable/ debtors,
capital.,Sundry/trade creditors/creditors/ Government and other trustee securities
Account payable,Bills Payable / trade (other than for long term purposes e.g. sinking
acceptances funds, gratuity funds etc.),Readily
Fixed Deposits from public payable within Marketable/quoted govt. or other securities meant
one year,Short duration loans or deposits for sale,Interest accrued and
Provision for taxation, Proposed Dividends, receivables,Advance payment of taxes,
Provision for bonus, unclaimed dividend. pre-paid expenses,Advance payments for
Deposits from dealers, selling agents etc. merchandise; unexpired insurance
Advance payments from customers,
outstanding expenses and Accruals e.g.
wages & salaries, rent; expenses payable

TOTAL TOTAL
Contingent Liabilities: which may or may not arise. For example: aairns against the company not
acknowledged as debts; Arrears of fixed cumulative dividends; Bills discounted but not matured and
shown in the Balance Sheet; Letter of Credit; Guarantees given by the company on behalf of its
subsidiary company, employees etc.
How ratios are expressed
Ratios can be expressed in the following different ways: In %age terms such as net profit to sale ratio
(being 23%),In proportion such as current ratio (being 2:1),In no. of times such as stock turn over
ratio (being no of times )
IMPORTANT RATIOS & FORMULAE LIQUIDITY RATIOS
 Current Ratio : Current assets / Current liabilities
 Acid Test or Quick Ratio Quick assets / Current liabilities
 Net working capital : Long term sources - long term uses OR current assets - current liabilities.
SOLVENCY or LEVERAGE RATIOS
 Debt-Equity Ratio
 Long term outside liabilities/Tangible net worth
 Debtor service coverage ratio (DSCR)
(Net profit + depreciation + amount of interest on th long term liabilities) / (amount of interest
on the lob term liabilities + amount of instalment of long tern liabilities).

ACTIVITY RATIOS
 Stock OR Inventory turnover: Sales / Stocks
 Debtor turnover : Sales / sundry debtors (i.e. book debts, receivables)
 Debtors' velocity or debt collection period Book-debts / sales x 12 PROFITABILITY
 Return on equity : Profit / tangible net worth x 100
 Return on investment or capital employed Profit / Investment (or capital employed) x 100
 Net Profit Ratio -=Net profit / Sales x 100
BREAK-EVEN RATIOs
Costs of a business cart be classified into fixed and variable. Fixed costs are those costs which do not
change with production like rent, salaries and variable costs are those which change with production
like raw material, wages, power, repair etc.
1. Profit = Sale minus fixed cost minus variable cost
2. Contribution = Sale price per unit minus variable cost per unit or Sale-variable cost
3. Break Even Point in units = Fixed Cost/(Sale Price per unit — Variable Cost per unit)or
Fixed cost/contribution per unit
4. Break Even Point in Rupees = Fixed cost x sale/(Sale- Variable Cost)
5. PV Ratio = contribution/sales x 100
6. Break Even Point = Fixed cost/PV Ratio
7. Break Even Point in terms of capacity utilization=Break even units/Installed capacityx 100

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 8. Margin of Safety =(Actual Sale — Break Even Sale)/ Actual Sale*100

Earning Per Share (EPS) :

The ratio denotes per share profit of a company. It can be used to compare 2 different companies" profitability.
To calculate the ration only the no. of equity share is taken (and not of preference shares). It can be calculated
as under: Net profit after tax and preference dividend/ no. of equity shares. It help in understanding market
pricing of the equity share.

Price Earning Ratio (PER) : The ratio indicates the current market price vis-a-vis the earning per share. It can
be calculated as under: Market price of the equity share / earning per share
Different users of ratios
Long term creditors Short term lenders (Banks) Shareholders
Fixed charges cover = Quick ratio ---
Earning per share =
Income before interest and Quick assets / current liabilities
Profit available for equity holders
tax / Interest charges
/ no. of equity shares
Debt service coverage ratio = Current ratio = Dividend Yield ratio =
Cash profit for debt service / annual Current assets / current liabilities Dividend per share / market
interest and principal price per share

Cash Flow Statement :Cash flow statements are useful in planning short term
operation of the business. Usually cash flow statement is prepared by cash receipt
& payment.
Fund Flow Statement : Fund flow statement is a statement of sources and uses of funds for a period.
Fund means net working capital. Fund flow statement indicates the changes in net working capital
position and the reasons for the same.
 For preparing this statement, balance sheet of two consecutive years and profit and loss
account for the intervening period is required.
 Long term sources of funds include issue of capital, raising term loans, debentures, funds from
operations and long term uses include purchase of fixed assets, payment of dividend, payment of
taxes, repayment of term loans.
 If long term sources are more than long term uses, it will result in increase in net working
capital and vice versa
Various types of long term source, short term sources and uses are given below:
Net Profit after Tax LTS Tax Payments LTU
Dividend Payments LTU Increase in Term Loans LTS
Increase in Other CL STS Increase in Stock STU
Decrease in TL LTU Depreciation Neither S nor U
Increase in short term bank borrowing STS Increase in Fixed Assets LTU
Net Loss LTU Increase in Receivables STU
Reduction in fixed assets LTS Drawings by partners LTU
Decrease in Receivables
LTS Increase in Capital LTS

CONCEPT OF WORKING CAPITAL

Working Capital is defined as the excess of current assets over current liabilities. It is the same as net current
assets. It represents the investment of a company's funds in assets which are expected to be realised within a
relatively short period of time. It is not an investment in an asset with a long life but, as the name implies,
represents funds which are continually in use and are turned over many times in a year. It is capital used to
finance production, to support levels of stock and to provide credit for customers. The three main current
assets are stock, debtors and cash. They can be funded by short-term finance, i.e. current liabilities, or by
medium and long-term finance in case of permanent current assets or core current assets.
Components of Working Capital
The firm's Working Capital may be viewed as being comprised of two components:
1. Permanent working capital: These funds represent the current assets required on a continuing basis
over the entire year. it represents the amount of cash, receivables and inventory maintained as a minimum, to
carry on operations at any time, as a safety measure.
2. Variable working capital: These funds represent additional assets required at different times during
the operating year. Added inventory must be maintained to support the peak selling periods. Receivables

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 increase and must be financed following periods of high sales. Extra cash may be needed to pay for
increased supplies preceding high activity.
Working Capital Cycle
Working Capital cycle is the length of time that elapses between the company's outlay on raw materials,
Wages and other expenditures and the inflow.of cash from the sale of the goods. The length of the cycle
depends upon
(I) stock of raw material required to be held.
(ii) The work in process which depends on the process involved in manufacturing or
processing the raw material.
(iii) Credit required to be provided to the purchasers.
Longer the working capital cycle, the more is the working capital requirement i.e. need for
maintaining the current assets.
Working capital & Net working Capital Working capital (or gross working capital) refers to
the amount of total current assets.
Liquid surplus or net working capital refers to the surplus of long term sources over long term uses
as per RBI prescription (also calculated by banks as difference between current assets and current
liabilities). It is desirable, that the net working capital should be positive which would signify
liquidity and availability of. Adequate working funds. If in a particular case, the net working capital is
negative, the difference will be called the working capital deficit.
The working capital can also be classified as:
a Permanent working capital which is minimum amount of current assets necessary for carrying
out operations for a period.
b Fluctuating working capital : Additional assets required at different times during an operating
period due to cyclic factors.
c Seasonal working capital means requirement for additional current assets due to seasonal
nature of the industry.
d Adhoc working capital : Additional funds for meeting the needs arising out of special circumstances
e.g. execution of special order, delay in receipt of payment of receivables.
e Working capital term loan : A long term loan given to meet the working capital margin needs of a
borrower. The concept was introduced by. Tandon Committee.
f Working capital gap = total current assets less other current liabilities. It is financed by net working
capital and bank finance for working capital (called MPBF).
SUMMARY - WORKING CAPITAL TERMS
Particulars Classification
Working capital Current assets such as cash, stocks, book-debts, other
current assets
Net capital working Current assets — current liabilities OR Long term sources — long term
uses
Working gap capital Current assets — current liabilities
(other than bank borrowing — i.e. OCL)
Working limits capital Bank facilities needed to purchase current assets. These facilities are
cash credit, overdraft, bills
purchase/discounting, pre-shipment or post-shipment loans etc.

Factors which determine the working capital The following factors determine the overall working
capital levels of the industrial units: Policies for production, Manufacturing process, Credit Policy of
the unit, Pace of turnover , Seasonality
Process for assessment of working capital requirements Generally there are three methods
followed by banks for assessing working capital of a firm i.e. (i) traditional method suggested under
Tandon Committee, (ii) turnover method suggested by Nayak Committee and (iii) cash budget method
followed in case of seasonal industries.
Methods of Assessing Bank Finance
Holding Norms based Method of Assessment of Bank Finance
Various steps used in the process include following
(a) Deciding on the level of turnover: : in case of existing units, past performance can help in
ascertaining projected turnover. In case of new enterprise, it is based on production capacity,
proposed market share, availability of raw materials, industry norms etc.
(b) Assessment of Gross working capital: This is sum total of various components of working capital
(i) inventory: For assessment of stock levels of raw material, work in process and finished
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goods, information like lead time, minimum order quantity, location and number of suppliers,
percentage of imported material, manufacturing process etc are considered. Industry norms may be
helpful in this regard.
(ii) Receivables/bills: it can be assessed easily. It is governed by market practice relating to a
particular business.
(iii) Other Current assets: A reasonabl e estimate of other current assets like
cash l evel , advance to suppliers, advance tax payment etc is calculated. Sources of
Meeting Working Capital Requi rement
(i) Own sources: This represents available net working capital. Further, as the estimate of limits is based on
the projected balance sheet at the end of the current accounting year, some internal accruals are also taken
into account. Bank may stipulate additional NWC if available NWC and anticipated internal accruals are not
enough to maintain desired current ratio.
(ii) Suppliers's credit based on market practice
(iii) Other current liabilities like salary payable, advance from customers etc.
(iv) Bank Finance
Calculation of Bank Finance
This method was suggested by Tandon Committee. Though banks have been given complete discretion in this
regard, yet banks still follow this method.
There are three methods of lending.
1. As per first method of Tandon Committee, permissible bank finance is equal to 75% of the working
capital
gap. Working capital gap is equal to total current assets minus current liabilities other than bank borrowing.
Borrower's margin will be 25% of the working capital gap. This method will give a current ratio of minimum
1.17:1.
As per second method of Tandon Committee, permissible bank finance is equal to 75% of the current assets
minus 100% of current liabilities other than bank borrowing. Borrower's margin will be 25% of the current
assets. This method will give current ratio of minimum 1.33:1.
As per third method, borrower is required to bring 100% of core current assets and at least 25% of the
remaining current assets as margin.
If the borrower is not able to bring required margin, he may be given working capital term loan. Thus, working
capital term loan was suggested by Tandon Committee.
Cash Budget Method
In any economic activity there will be outflows to meet the expenses of production and inflows from the sale
of output. Any firm requires working capital from the bank to meet the gap between these inflows and
outflows. Therefore, under this method, cash flows are projected on monthly or quarterly basis to ascertain
the deficit. Bank finance will be equal to cash deficit. This method is used while financing seasonal industries
like tea, sugar, service oriented industries like software, Non banking finance companies, construction
contracts. Turnover Method:
6. This method was suggested by Nayak Committee.
This method is to be applied in the case of working capital limits up to Rs 5 crore in the case of Small
Manufacturing enterprises and up to Rs 2 crore in other cases.
This method is simple in nature. According to this method, working capital requirement is equal to 25% of the
accepted projected annual sales; bank finance is 20% of the projected annual sales or 80% of the
working capital requirements and margin is 5% of the projected annual sales or 20% of the working
capital requirements. For example, if the current sales are Rs 400 lac, projected growth is 25%, then
projected annual sale will be Rs 500 lac. Accordingly, working capital requirement will be Rs 125 lac, bank
finance Rs 100 lac and borrower's margin Rs 25 lac. However, actual drawing power will be allowed as per
security available.
if net working capital available with the borrower (i.e. borrower's margin) is more than 5% of the projected
annual sale, the limits can be adjusted accordingly.
7. The requirement as per this method is minimum assuming working capital cycle of the unit at 3 months.
If working capital cycle is more, Bank may consider higher requirement depending on the business of the
borrower.
Turnover Method (Nayak Committee) It is used where the aggregate fund-based working
capital credit limits are upto Rs. 500 lac from the banking system.
Working capital : Minimum 25% of the projected turnover (or 3 months's sale).
Working capital limits : Minimum of 20% of projected annual turnover after satisfying about
reasonableness of the projected annual turnover. Borrowers' margin : 5% of projected turnover.
If it is higher than 5%, the bank limits can be fixed at a lower level than 20%.
The margin proportionately increases with increase in period of operating cycle (ratio of margin to
bank finance should be 1:4.

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Calculation of working capital
Estimated sale turnover (projected sale) Rs.80 lac
Minimum Working Capital @ 25% estimated sales (which Rs.20 lac
represents 03 months' sales)
Contribution of borrower @ 5% Rs.4 lac
Minimum Bank credit for working capital @ 20% of projected sales Rs.16 lac
Traditional method
As per traditional method (Tandon Committee), the level of working capital is determined both
by the length of the operating cycle and the size of the sales.
The method is applicable to working capital limits above Rs.5 lac. In a circular dated 04.11.97, RBI
withdrew the mandatory application of this method and allowed banks to use their own method.
The total of anticipated level of current assets calculated on the basis of estimated sales and by
applying the norms for inventory and receivables, is the level of working capital. The amount of bank
limit, can be determined as under :
a: Assess the level of net working capital
(surplus of long term sources over long term uses) available, which normally should not be less than
25% of total current assets.
Work out bank finance to be sanctioned being gap of total current assets less NWC and other current
liabilities.
Calculation of limit
Method of lending
1st Method 2"d method

1.Total current assets 2000 2000

2.Less other current liabilities 200 200
capital gap (1-3) 1800 1800
_3.Working
Minimum stipulated NWC 450+ 500++
Maximum Permissible Bank Finance 1350 1300

+ Under 1st method it is 25% of working capital gap. ++ Under 2nd method it is 25% of total current assets
Loan Delivery System
1. This method was suggested by Jilani Committee.
2. Applicable to units with working capital requirements of Rs 10 crore and above from the banking
system.
1. Accordingly to this method, 80% of the working capital requirements were to be sanctioned by
way of a demand loan and balance 20% as fluctuating cash credit limit. Now, RBI allowed banks to
fix the percentage of demand loan as per their discretion.
2. The method is not applicable in respect of (a) Bill Finance (b) Export credit (c) Seasonal
industries .(d) sick units
WHAT THE CHANGE IN RATIOS MEAN
If a firm realises book debts in cash — No change in current assets, quick ratio, current ratio or net working
capital.
If a firm realises old assets or non current assets in cash or sell fixed assets in cash: current assets, quick ratio,
current ratio or net working capital will all improve
If a firm issues bonus shares — There is no change in any ratios
If a firm issues rights shares — Current ratio, quick ratio, net working capital, debt equity ratio, net worth will
improve
If a firm revalues its fixed assets and creates revaluation reserve: Net worth and tangible networth increase.
Debt equity ratio declines / improves. There is no effect on current assets or quick assets or current ratio and
quick ratio.
If increase in long term sources is more (say 125%) than increase in long term uses during a year liquid
asset would increase, liquidity would improve.
If increase in long term is uses more (say 125%) than increase in long term sources during a year — liquid
asset would decrease, liquidity would decline.
Lower and higher break even point : A firm with lower break even point has better chances for earning profits.
A firm with higher break even earns lower profits.
If break-even point of a firm goes up — It is an indication of dedine in profits
If break-even point of a firm goes down — It is an indication of increase in profits
If debtor-turnover ratio increase — It shows efficiency in recovery

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 If debtor-velocity ratio decrease — It shows firm is allowing credit to buyer of its products for a lesser period
If stock-turnover ratio increase — It is better use of stocks
If current ratio increases and quick ratio remain constant — It shows higher %age of stocks in or lower %age
of receivables in total current assets.
If current ratio is constant and quick ratio increases — It shows lower %age of stocks or higher %age in
receivables in total current assets.

T EST YO URSE LF M CQ s – RE C ALLED Q UEST IO NS

FIN ANC IAL ST AT E M E NT AN ALY SIS
1. Balance Sheet is a statement of Assets and Liabilities or statement of Sources and Uses
*(a) as on a date (b) as on 31st March (c) for 12 months (d) for a particular period (e) none
2. Assets can be represented as :
(a) uses of funds (b) sources of funds (c)what the business owns *(d) both (a) and (c) above
3. Liabilities can be represented as :
(a) sources of funds (b) uses of funds (c) what the business owes *(d) both (a) and (c) above
4. Current assets are defined as :
(a) assets which are expected to be consumed within one year
(b) assets which are expected to be converted into cash within one year
*(c) either (a) or (b) (d) assets which are to paid out of current liabilities (e) none of the
above
5. Fixed assets are defined as :
(a) assets which are fixed to the land *(b)assets which are acquired for production and not meant for
sale
(c) assets which have a fixed value (d) assets which can not be sold easily (e) none of the above
6. Term liabilities are one :
(a) which are to be met within one year from the date of balance sheet
*(b) which are not payable within one year from the date of balance sheet
(c) which were raised for more than one year (d) which are not payable immediately (e) none
7. Current Liabilities are those liabilities
(a) which are payable within one year (b) which are expected to be met from proceeds of current
assets
(c) which are payable after one year *(d) both (a) & (b) (e) both (b) & (c)
8. Which of the following is not classified as current asset?
(a) stocks (b) prepaid expenses *(c) pre operative expenses (d) book debts (e) none
Which of the following is classified as intangible or fictitious asset?
(a) Goodwill (b) Preliminary expenses (c) Accumulated losses (d) Deferred Revenue Expenses
*(e) All of these
10. Which of the following is a current liability for calculation of current ratio?
(a) Sundry creditors (b) Borrowings from banks (c) Provision for tax
(d) Instalment of term loan payable within one year *(e) All of these
11. Debtors which are old for more than 6 months are to be classified as
(a) Current Assets (b) Intangible Assets (c) Non Current Assets (d) Fixed Assets
12. Instalments of term loan falling due within a year are treated as for calculation of current ratio
:
*(a) current liability (b) current asset (c) term liability (d) net worth
13. Quick assets mean:
(a) all assets minus inventory (b) all current assets minus inventory
(c) assets other than cash (d) all current assets minus inventory and prepaid expenses
14. Sales minus cost of sales is referred to as :
(a) operating profit (b) net profit (c) profit before tax (d) profit after tax *(e) gross profit
15. Operating profit is arrived at by :
*(a) reducing administrative, general and selling expenses from gross profit
(b) adding back depreciation to gross profit (c) adding back depreciation and interest to net
profit
(d) adding back interest expenses to gross profit (e) none of the above
16. Cash profit is:
(a) gross profit before depreciation (b) net profit after depreciation
(c) net profit before depreciation (d) gross profit after depreciation (e) none of these
17. Cash loss is:
(a) gross loss before depreciation (b) net loss after depreciation (c) net loss before depreciation
(d) gross loss after depreciation (e) none of these
18. Tangible net worth means :
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*(a) Paid up capital and reserves minus intangible assets (b) Net worth minus investment in fixed
assets
(c) Paid up capital and reserves minus instalment of term loan payable within one year
(d) Net worth minus current liabilities (e) Total Assets minus intangible assets
19. The term Liquid Surplus or Net working capital refers to :
(a) total investment in current assets (b) excess of current liabilities over current assets
*(c) excess of current assets over current liabilities
(d) excess of capital plus free reserves over term liabilities (e) none of the above
20. Net working capital will be positive when :
(a) current assets are more than current liabilities (b) current liabilities are more than current assets
(c) current ratio is more than one (d) when current ratio is less than one *(e) both (a) & (c)
21. Liquidity ratios include :
(a) Current Ratio (b) Quick Ratio (c) Debt equity ratio *(d) Both (a) & (b) (e) all above
22. Current Ratio is obtained by :
(a) reducing current liabilities from current assets and dividing the resultant figures by current
liabilities
(b) dividing current liabilities by current assets *(c) dividing current assets by current
liabilities
(d) dividing outside liabilities by net worth (e) none of the above
23. Current Ratio is an indicator of ____________ of the borrower:
*(a) liquidity position (b) solvency (c) profitability (d) all above (e) none of the above
24. Current Ratio of less than 1 indicates that the borrower:
(a) has sufficient current assets to meet current liabilities (b) may be unable to pay current dues
(c) has borrowed excessively from outsiders (d) any of the above (e) none of the above
25. Current ratio as per second method of lending given by Tandon Committee works out to :
(a) 1:1- (b) 2:1 (c) 1.17:1 (d) 1.33 : 1 (e)none of these
26. Acid Test Ratio is supportive ratio for ____
(a) Debt-Equity Ratio (b) Current Ratio (c) Gross Profit Ratio
(d) Net Profit Ratio (e) Debt-Service Coverage Ratio
27. The following are the Current and Quick Ratio of a firm for two consecutive years
Current Ratio 1.6:1 & 2.3:1; Quick Ratio 1.1:1 & 1:1. The trend indicates that :
(a) the borrower is relying heavily on term loans
(b) there is reasonable investment from current liabilities in current assets
(c) there is excessive investment in inventory and prepaid expenses
(d) more sales are being effected on credit than before (e) none of the above
28. Debt Equity Ratio is relationship between :
(a) total liability and net worth (b) current assets and current liabilities
(c) term liabilities to total net worth *(d) term liabilities to tangible net worth (e) either (a) or (d)
29. A decreasing Debt Equity Ratio means :
*(a) higher stake of owners (b) lower stake of owners (c) decrease in profitability of the business
(d) sharp increase in profitability of the concern . (e) none of the above
30. Profit & Loss account helps in computing
(a) Profitability Ratio (b) Solvency Ratio (c) Turnover Ratio (d) Liquidity Ratio
31. Return on Investment (ROI) falls in the category of :
*(a) Profitability Ratios (b) Solvency Ratios (c) Liquidity Ratios (d) all above
32. Gross Profit Ratio is obtained by :
(a) dividing gross profits by net sales and multiplying it with 100
(b) dividing net profit by gross sales and multiplying it with 100
(c) dividing gross profit by gross sales and multiplying it with 100
(d) net sales by net profit (e) none of the above
33. Which of the following ratios is one of the most important ratios to ascertain the profitability ?
(a) Debt Equity Ratio (b) Return on Investment (c) Working Capital Turnover Ratio
(d)Gross Profit Ratio (e) Quick Ratio
34. 'Activity Ratios' or 'Turnover Ratios' indicate :
(a) extent of profitability *(b) efficiency of the concern in the utilisation of assets
(c) stake of owners' funds (d) stake of term lending institutions (e) none of the above
35. Debtors Velocity Ratio indicates :
(a) proportion of credit sales to annual sales (b) proportion of credit sales to fixed assets
(c) average time-lag between sales and the collection of debts
(d) average time taken in effecting sales to customers (e) none of the above
36. A decreasing trend of Debtors Velocity Ratio implies :
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 134 | P a g e
(a) more credit being extended(b) less likelihood of bad and doubtful debts (c) poor debt collection
(d) more demand for product of the seller (e) none of the above
37. Debt Service Coverage Ratio (DSCR) indicates :
*(a) capability of unit to generate adequate cash accruals to pay instalments of term loans and interest
thereon (b) knowing short term liquidity of borrower (c) overall profitability of the unit
(d) ascertaining borrower's stake in business (e) none of the above
38. Debt Service Coverage Ratio is used for sanction of :
(a) Working Capital Facilities *(b) Term Loans (c) Bank Guarantee (d) Letter of Credit
39. Ideal DSCR is
a) 1:1 (b) 1.33:1 (c) 1.5:1 *(d) 2:1 (e) None of these
40. Short term solvency of a unit is indicted by
a) Debt equity Ratio b) Total indebtedness ratio c) proprietary ratio *d) Current ratio
41. A very high Current Ratio of say 4:1 is :
(a) highly desirable as it shows capacity of the borrower to repay current dues without difficulty
*(b) not desirable as it means less efficient use of funds
(c) desirable as it means that the borrower is relying more on capital and reserves than on outside
borrowings (d) desirable as it ensures safety of bank funds in the long run (e)none of the above
42. Proprietory Ratio is the relationship between :
(a) total assets to tangible net worth *(b) capital or shareholders' funds to total tangible assets
(c) net fixed assets to long-term debts (d).either (a) or (b) (e) none of the above
43. For calculating Debt Service Coverage Ratio (DSCR), the numerator will be :
*(a) Profit after tax plus depreciation plus interest on term borrowings
(b) Profit before tax plus depreciation plus interest on term borrowings
(c) Profit after tax plus interest on term borrowings (d) Profit before tax plus interest on
term'borrowings
44. Which of the following is incorrect?
(a) For a dealer of cars, a car is a current asset
(b) Security deposits for electricity or telephone is a non current asset.
(c) Prepaid rent is a current asset
*(d) For a transport operator, a car is a current asset(e)Pre expenses is a fictitious asset
45. The short term solvency of a unit can be judged by
a) Debt Equity Ratio *b) Current Ratio c) Debt collection period
d) Gross profit margin e) None of these
46. Debt Equity Ratio is calculated by dividing
*(a) Long term liability by tangible net worth b) Long term liability by paid up capital and
reserves
(c) Tangible net worth by long term liability d) Paid up capital and reserves by long term
liability
(e) Total outside liability by paid up capital
47. Working capital gap means
(a) Current Assets minus Current Liability
*(b) Current Asset minus Current Liability other than bank
borrowing (c) Current Assets minus inventory & prepaid expenses
(d) Current Assets minus paid up Stocks
(e) Quick Assets minus Current Liability other than bank borrowing
48. Which of the_following is not a fixed cost of a manufacturing unit? a)
raw material consumed b) rent paid for factory shed c) consumption of
power
d) salary of the office staff e) commission paid to salesmanf) salary of manager
g) wages paid to production staff based on production *(h) a,c,g & e (1) none
49. Break even point in a production process is the point where:
a) fixed costs equal variable costs (b) fixed costs start rising on further production
*(c) total of fixed and variable costs just equals the total revenue (d) both (a) and (c)
50. Break Even Point represent a level of sales at which :
(a) there is no profit or loss (b) sales revenue is equal to total cost
(c) a firm is able to recover both fixed and variable costs *(d) all of these (e) none of these
51. Operating cycle in an industrial concern means
a) Conversion of raw materials into semi-finished goods
b) *Conversion of raw materials into finished goods sundry debtors and back into cash
c) Conversion of raw materials into finished goods
d) Conversion of sundry debtors into cash e) none
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 135 | P a g e
52. As per first method of lending of Tendon Committee bank should finance 75% of:
*a) working-capital gap (b) total current assets (c) net working capital
d) lower of (a) or (b) above (e) none
53. In the second method of lending under Tendon Committee:
(a) Bank should finance 75% of working capital gap
(b) Bank should finance 50% of the current assets
*(c) Borrower should contribute 25% of total current assets and total current liabilities including
bank
borrowing should not exceed 75% of current assets
(d) Lower of (a) & (b) e) none
54. As per Nayak Committee recommendations as modified from time to time, 20% of projected sales
are to be sanctioned as working capital to SSI units with WC limits up to
a) Rs. 50 lakh b) Rs. 100 lakh c) Rs. 200 lakh *d) Rs. 500 lakh e) none
55. Funds flow statement means:
(a) operating statement for a period (b) statement of sources and use of funds as on a date
*(c) statement of sources and use of funds for a period (d) statement of assets and liabilities as on a
date
56. Which of the following is a long term source?
a) Paid up capital and reserves b) Term loan from financial institution
c) Plant and machinery *d) Both (a) & (b) e) Both (b) & (c)
57. Which of the following is not a long term use?
a) Goodwill b) Land & Building c) Investment in subsidiaries
*d) Debentures e) Pre operative expense
58. The profit retained in the business are classified as
b) Current asset as these are easily realizable (b)Current liability as these are payable to
shareholders
c) Assets as these are owned by business *(d) Liabilities as this represent as a source of funds
e) Long term liability as these are payable to shareholders after one year
59. Which of the following is incorrect? : a) Increase in liabilities is a source of funds b) Decline in
assets is a source of funds c) Increase in assets is a use of funds d) Decline in liabilities is a use of
funds *e) None of these ( ANSWER IS - * MARKS )
TEST YOUR SELF
Classify the following assets and liabilities for Balance Sheet of M/s ABC Enterprises Company for the
year as on 31.3.2013 & 31.03.2014
31.03.13 31.03.14 31.03.1 31.03.14
Cash 15000 26400 Good will 3
3000 3000
Provision for Expenses 1200 1500 Capital 20000 25000
Vehicles 13000 10000 Sundry Debtors 16000 20000
Unsecured loans (Long 8000 2000 Term Loan 20000 25000
term)
Investment in other 2000 2500 Plant and 20000 22500
firms
Pre Operative Expenses 700 200 Machinery
Sundry Creditors 12000 14000
Stocks 20000 25000 Reserves 15000 18000
Prepaid expenses 1500 2200 Expenses payable 4000 3800
Security Deposit 2000 3000 Bank Borrowings / 13000 25000
Land and building 12000 11500 cash credit
Debentures 12000 12000
Sales 100000 110000 Net profit 5000 3000
Interest on Term Loan 3000 3700 Depreciation 2000 2200
Calculate Current Ratio / Quick Ratio / Net working Capital / Debt Equity Ratio / Debt
Service Coverage (consider that installment during the year is 4000) Ratio / Stock turnover
ratio / Debtor Turnover ratio / Debtor velocity ratio / Net profit %.
Answer:

LIABILITIES 31.3.13 31.3.14 ASSETS 31.3.13 31.3.14

OWNERS FUNDS FIXED ASSETS
Capital 20000 25000 Land and Building 12000 11500
Reserves 15000 18000 Plant and Machinery 20000 22500
B TOTAL(Net Worth) 35000 43000 Vehicles 13000 10000

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 136 | P a g e
 LONG TERM LIABILITIES SUB TOTAL(Fixed 45000 44000
Unsecured Loans 8000 2000 Assets)
NON CURRENT
Term Loan 20000 25000 ASSETS (NCA)
Investment in Firms 2000 2500
Debentures 12000 12000 Security Deposit 2000 3000
SUB TOTAL(Term 40000 39000 SUB TOTAL (Total 4000 5500
Liabilities) Non Current Assets)
CURRENT LIABILITIES INTANGIBLE ASSETS
Provision for Expenses 1200 1500 Goodwill 3000 3000
Sundry Creditors 12000 14000 Pre Operative 700 200
Expenses Payable 4000 3800 Expenses
SUB TOTAL(Total Intangible
3700 3200
Assets)
Bank Cash Credit 13000 25000 CURRENT ASSETS
SUB TOTAL(Current 30200 44300 Cash 15000 26400
Liabilities) Sundry Debtors 16000 20000
Stocks 20000 25000
Prepaid Expenses 1500 2200
Total Current 52500 73600
GRANDTOTAL 10520 Assets - Subtotal
12630 GRANDTOTAL 105200 126300
(Total of Liabilities) 0 0 (Total of Assets)

Calculations:
31.3.13 31.3.14
Networth Capital + Reserves 35000 43000
Intagible assets 3700 3200
Tangible NW NW - Intangibles 31300 39800

Long Term Liabilities 40000 39000

Long Term Sources LTL + Networth 75000 82000

Current Liabilities
44300
Short Term Sources (= Current Liabilities) 30200

Outside Liabilities (= LTL + CL) 70200 83300

Long Term (= Fixed Assets+ NCA+ 43700 47200

Uses Intangible Assets

Current Assets
Gross Working (= Total CA) 52500 73600
Capital

Short Term Sources (CL) 30200 44300

Net Working Capital CA – CL 22300 29300

Quick Assets CA –Stocks& Prepaid Exp 31000 46400

Current Ratio CA ÷ CL 1.73 1.66

Quick Ratio QA ÷ CL 1.02 1.04

Debt Equity Ratio LTL ÷ TNW 1.27 0.98

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 137 | P a g e
 DSCR (Profit + Depreciation + TL Interest) ÷ 1.71 1.16
(TL Installment + TL Interest)

Stock Turnover Sales ÷ Stocks 50 44

Ratio
Drs T/o Ratio Sales ÷ Sy Debtors 62.5 44
Debtors Velocity (Sy Drs÷Sales) x 12 0.24 0.27
Ratio
Net Profit % (NP ÷ Sales) x 100 0.50 0.27
Return on NW (NP ÷ TNW) x 100 15.97 7.54

COMPARATIVE ANALYSIS OF FINANCIAL STATEMENTS

SITUATION INDICATIONS GUIDELINES
Increase in Sales A favourable trend Ascertain that increase is
qualitative and not on
account of inflation
Decrease in Sales Not a favourable trend May be on account of under- trading

Increase in Profit favourable Indication Ascertain th e porti on of

profits retained in the
business

Decrease in Profit Not a favourable trend Ascertain the reasons

Increase in Debtors A favourable indication, if Ascertain the reasons
accompanied by a higher % of an check up the age of
increase in sales check-up, the bad debtors Delete debtors
& doubtful debts, if any may above 6 months obtain confidential
indicate unsatisfactory report from banker.
recovery

A favourable Indication, it should be

accompanied b y a g r o w t h i n Sudden Decrease in Debtorsmay
Decrease in Debtors
s a l e s , i t indicates effective sales indicate diversion of funds.
management

Increase in Creditors Indicates better Credit A mere increase in Creditors

terms with the suppliers, Increase may indicate that the borrower
should be accompanied an is not in
proportionate increase in business A position to generate enough funds
needed for the payment to trade
Creditors
Increase in Capital It indicates additional fu n d s Ensure that the increase is not due to
br ou gh t i n b y th e unit-a favourable capitalization of reserves.
indication, Ascertain the
purpose for increase & its ultimate
utilization

Increase in Fixed Assets Is it on account of replacement of Ensure that the capital

Machinery in the normal business? expenditure is acceptable to the
Is it for the sake of expansion banker and there is no diversion of
/ funds.
diversification plans
Decrease in Provisions Ensure that taxation &
other liabilities met out of earning for
the last year

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 138 | P a g e
Increase in Inventory Ensure that the increase in inventory Ensure that increase in inventory
is for production i.e.not for speculative purpose
Depreciation Ensure that Depreciation has been Ensure that there is no change in
charged the depreciation method.

Reduction in Term Loan It indicates a favourable position. Ensure that repayment is not out of
The borrower has got repayment working capital funds.
capacity

8. FOREIGN EXCHANGE
Foreign Exchange is a commodity. Forex transactions (sale/purchase) are regulated in India under :
FEMA 1999.Objective of FEMA: To facilitate external trade and orderly management and development
of inter-bank forex markets in India. Inter-bank forex market regulated in India by : RBI. Inter-bank
forex market timing: 9 am to 5 pm (Saturday-closed).Foreign Currency rates are fixed in India by:
Market forces of demand and supply (Higher demand - higher rate).Foreign trade is regulated by:
DGFT. In India direct rates is used W.e.f. 1.8.1993,.
Introduction
1. in India, forex transactions are subject to Foreign Exchange Management Act 1999.
2. The Act came into operation with effect from 1.6.2000.
3. The main objective of the Act is to ensure orderly conduct of forex transactions.
4. In India, exchange control is exercised by RBI and trade control is exercised by DGFT
(Director General of Foreign Trade.
5. Only Authorised persons i.e. who are authorised by RBI can undertake forex transactions.
Authorised persons would include Authorised Dealers (AD) and Full fledged money
changers.
6. Banks have three types of correspondent bank accounts namely Nostro, Vostro and Loro
accounts.
7. Nostro account: It means our account with you. The account of a bank in India with a
foreign correspondent bank abroad in Foreign currency is called Nostro account. For
example, account of PNB Delhi with City Bank New york.
8. Vostro account: It means your account with us. The account of a foreign correspondent
bank abroad with a bank in India in Indian Rupees will be a Vostro account. For example,
account of City Bank New York with PNB Delhi.
9. Loro Account: Their account with them. For example, PNB has account with City Bank New
York. For PNB, this account is Nostro account. Similarly account of BOB with City Bank New
York is Nostro account for BOB. Far PNB, this account of BOB is Loro account.

Exchange Rates
1. Direct Rate: When foreign currency is fixed and value of home currency is variable, it is
Direct rate e.g. US$1= Rs 61.43;
2. Indirect Rate: When home currency is fixed and value of foreign currency is variable, it is
Indirect rate e.g. Rs 100= US $ 1.63.
3. In India, direct rates are applied. When direct rates are applied, the principle is "Buy Low and
Sell High".
4. In India, rates are determined by market forces of demand and supply and not by RBI or any
other agency.
5. The exchange rate for purchase or sale of foreign currency are most unfavourable as
holding cost of currency is high.
6. The difference between buying & selling rate is called Dealer's spread

Summary of Exchange Rate Application

Rate Transaction
TT-Setting Outward remittance such as DD, TC
etc. 1 Cancellation of purchase such
as:
 bills purchased returned unpaid,
 bills transferred to collection account
Bill-selling

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 139 | P a g e
  forward purchase contract cancelled
TCs/ currency note selling Transfer of proceeds of import bills even if these are by way
DD or TT_ At the discretion of the AD
TT-Buying  cancellation of outward TT, MT etc.
 clean inward remittances (TT,DD, MT) where cover already
received abroad
 Conversion of proceeds of instruments that are sent for collection
 Cancellation of forward sale contract
Bills-Buying  Purchase of bills and other instruments

TCs/currericy note Buying At the discretion of the AD

R RETURNS
1. R Return is a statement of purchase and sale of forex by an authorised dealer.
2. It is sent to RBI fortnightly as on 15th and last day of the month. Sent twice a month.
3. With effect from 1st Jan 2009, it will be sent by bank as a whole under the Foreign Exchange
Transactions Electronic Reporting System (FETERS).
4. R Return is prepared to know balance of payment position.

Non Residents and their Accounts

Resident: As per section 2(v) of the FEMA 1999, a person is called resident in India if he stays in
India for more than 182 days during the preceding financial year except those who have gone
out of India for taking up employment outside India or for carrying on a business or vocation
outside India or for any other purpose ndicating his intention to stay abroad for indefinite
period. NON Resident: Person resident outside India means a person who is not resident in
India. NRI has been defined in Income Tax Act. Definition of NRI: However, as per RBI
guidelines, a non resident Indian can be a person of Indian Jationality or a person of Indian
Origin.
Person of Indian Nationality (PIN): A Person of Indian Nationality is one who holds an Indian
passport at the time of opening the account.
Person of Indian Origin: A. Person of Indian Origin is one who is presently not a national of
Pakistan or Bangladesh and : (a) who at anytime held an Indian passport; or (b) he himself,
either of his parents or any of his grand parents was a citizen of India by virtue of Constitution
of India or the Citizenship Act,1955 ; or (c) the person is a spouse of Person of Indian
Nationality / Origin.
Overseas Corporate Bodies are those in which at least 60% shareholding is of NRI. OCBs are not
allowed to open NRI accounts.
Students who go abroad for studies have also been given the facility of opening NRI accounts.

Non resident accounts are of 3 types (a) Non Resident ordinary (b) Non Resident (External)
(c) Foreign Currency Non Resident (Bank) account. Salient features of these accounts are as
under:
Non Resident Ordinary account:
1. Type of account: Saving, Current, FD and RD
2. Credit: can be local income as well as remittance from abroad.
3. Currency of deposit: Indian Rupees
4. Period of Deposit and interest rate : Fixed deposit can be opened for 7 days to 10 years.
Interest rate on term deposits and saving bank has been deregulated and banks will decide.
But it can not be more than as applicable to domestic deposits.
5. Joint account allowed with residents as well non residents
6. Interest income is taxable and tax will be deducted at source irrespective of type of account
and amount of interest. The rate of tax on interest on deposits out of foreign remittance is
20% and on deposits from local income is 30%. Surcharge and education cess will be extra.
7. Power of Attorney is allowed to residents for making local payments. Power of Attorney can
undertake all local payments in rupees including payments for eligible investments subject
to compliance with relevant regulations made by the Reserve Bank; and Remittance outside
India of current income in India of the nonresident individual account holder, net of
applicable taxes. The resident Power of Attorney holder is not permitted to repatriate outside
India funds held in the account other than to the non-resident individual account holder nor
to make payment by way of gift to a resident on behalf of the non-resident account holder or
transfer funds from the account to another NRO account.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 140 | P a g e
 8. Repatriation is allowed as per following details: (I) Remittance outside India of current
income like rent, dividend, pension, interest, etc. in India of the account holder. (ii)
Remittance up to USD one million, per financial year (April- March), for all bonafide
purposes, to the satisfaction of the authorised dealer bank. (iii) sale proceeds of immovable
property up to US $ 10 lakh per financial year without waiting for 10 year period.
Non Resident (External) and Foreign Currency Non Resident (Bank) account
There are certain common features in these accounts like
a. Credits: Only amount received from abroad can be credited to these accounts.
b. Joint account is allowed with Non residents. With residents joint accbunt allowed with close
relatives on F or S basis.
c. Power of attorney is allowed to residents. He can make local payments. POA can remit
money abroad if permitted by Power of Attorney.
d. Maximum loan against NRE and FCNR(B) : As per Bank discretion but margin should be
maintained
e. Interest income is free of Income tax and therefore tax is not deducted at source
f. Repatriation: Entire balance including interest can be repatriated abroad, .
Item NRE ' FCNR(BJ .
Currency of In Indian Rupees In any freely convertible currency
Deposit including
USD,GBP,Yen & Euro, Can dollar, Aus
Type of account savings, term deposit, current, RD only term deposit
Exchange Risk Exchange risk borne by account Exchange risk borne by the account
holder(s) opening bank
Period of Fixed Minim urn:1 year; maximum: Bank FD for 1 to 5 years
Deposit discretion.
Interest Rate Interest rate on fixed deposit and SB Rate of interest should not exceed
deposits have been deregulated and LIBOR for concerned currency and
banks are free to decide interest rates. maturity period plus 200 basis points
However it should not be more than rate for maturity less than 3 years and plus
applicable on domestic deposits. 300 basis points for maturity 3 years
Periodicity of Quarterly After every 180 days
interest

Distinctive features of NRE & FCR

1. Banks can grant loans against NR(E)RA and FCNR(B) deposits either to the depositors or third
parties up to any amount subject to margin.
2. If FCNR(B) is up to one year, no compounding is allowed.
3. In both NRE and FCNR deposits, if there is premature payment before one year no interest is
allowed. If there is premature payment after one year, penalty as per bank discretion.
Foreign Currency accounts of residents
Foreign currency accounts of residents are of three types namely (a) Resident Foreign Currency
account (b) Resident Foreign currency (domestic) account (c) Exchange Earners Foreign
Currency account. Salient features of the same are given as under:
Resident Foreign Currency Account:
1. Who can open: This account can be opened by a resident individual who was NRI and
returned to India after minimum stay of one year abroad.
2. Source of funds: Foreign exchange received as pension or other benefits from employer;
realization of assets held abroad, proceeds of FCNR/NRE.
3. Joint account is allowed with resident individuals who are close relatives on former or survivor
basis.
4. Type of deposit: Saving, current and fixed deposit.
5. Repatriation is allowed for entire balance including interest for any purpose.
Resident Foreign Currency (Domestic) account:
1. Who can open: Account can be opened by any resident individual.
2. Type of account: Non interest bearing current account.
3. Credits: Forex acquired on visit abroad, from any person on visit to India or gift or
honorarium for services, gift or honorarium on a visit abroad, unspent forex acquired during
travel abroad.
4. Joint account is allowed with resident individuals who are dose relatives on former or survivor
basis.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 141 | P a g e
 5. Repatriation is allowed for permissible current and capital account transactions.
Exchange Earners Foreign Currency account:
1. Who can open: The account can be opened by any resident. This account will be opened by
exporters.
2. Type of account: Non interest bearing current account.
3. Credits: 100% of foreign exchange earnings can be credited to this account. Earlier, EEFC
account holders were permitted to access the forex market for purchasing foreign exchange
only after utilizing fully the available balances in the EEFC accounts. RBI has lifted the above
restriction.
4. Packing credit can be adjusted out of such funds.

Liberalised Remittance Scheme (LRS) for Resident

Individuals RBI has started this facility in February, 2004 and its salient
features are as under:
1. Resident individuals can remit up to $ 250, 000 per financial year for current or capital account
or a combination of both for any approved purpose including remittance for gift or donations or
purchase of immovable property. (Capital account transaction means a transaction when there
is a change in asset or liability and current account transaction is one which is not a Capital
account transaction.)
2. Facility is not available to corporates, partnership firms, HUF, Trusts etc
3. Accounts' at foreign centres can be maintained for the purpose of remittance without RBI approval
4. The facility is not in substitution of the facilities like private travel, business travel etc.
The applicants should normally have maintained the bank account with AD for at least one year prior
to date of remittance. Some Permissible Current Account Remittances (in addition to LRS)
1. Release of exchange not exceeding USD 10,000 or its equivalent in one financial year, for one or
more private visits to any country (except Nepal and Bhutan).
2. Exchange facilities'not exceeding USD 100,000 for persons going abroad for employment.
3. Exchange facilities for emigration not exceeding USD 100,000 or amount prescribed by country
of emigration.
4. Release of foreign exchange up to USD 100,000 for maintaining relatives abroad.
5. Release of foreign exchange, not exceeding USD 25,000 per visit to a person, irrespective of
period of stay, for business travel, or attending a conference / specialised training or for
maintenance expenses of a patient going abroad for medical treatment or check-up abroad, or
for accompanying as attendant to a patient going abroad for medical treatment/check-up.
6. Release of exchange for meeting expenses for medical treatment abroad not exceeding the
estimate from the doctor in India or hospital/doctor abroad. (No estimate required for remittance
up to US $ 1,00,000)
7. Release of exchange for studies abroad not exceeding the estimate from the institution
abroad.(No estimate required for remittance up to US $ 1,00,000)
8. For studies abroad and meeting expenses of medical treatment, up to US $1,00,000 can be
released by AD on the basis of a declaration and estimate need not be insisted upon.

Foreign exchange in the form of currency can be taken abroad up to US $ 3000 and balance in the
form of Traveller cheque or Draft. For Iraq and Libya this limit is US $ 5000. For Iran, Russia and
CIS countries, no limit on currency. Indian rupees' can be taken abroad up to Rs 25000. Foreign
exchange can be issued against cash up to Rs 50,000.
Inward Remittance
1. Any person foreigner or Indian coming to India can bring any amount of foreign exchange in
India.
2. If foreign currency being brought is more than US$ 5000 or foreign currency and traveler cheque
is more than US $ 10,000, then the person bringing forex should make declaration before
Customs on the Currency Declaration form. If it is not submitted to Customs, then it can be
submitted to Authorised Dealer while surrendering foreign exchange.
3. Unspent Foreign exchange should be surrendered within 180 days of arrival in India whether it is
foreign currency or foreign traveler cheque. A resident individual can retain up to US $ 2000.
There is no limit on coins. Indian rupees can be brought up to Rs 25000. Exchange regulations
are not applicable in case of remittance to or from Nepal and Bhutan. Therefore, forex can neither
be taken to nor brought from Nepal and Bhutan. Indian rupees can be taken to Nepal and Bhutan
in the denomination of Rs 100 or below.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 142 | P a g e
 TEST YOURSELF: FOREIGN EXCHANGE

1. In how many currencies FCNR Account can be opened –

a) 4 b) 5 c) 3 d) 1 e) As per FEMA, can be opened in any Currency.
2. The following is an evidence of Exports
a) GR/SDF/SOFTEX form b) Bill of Entry c) A4 Form d) A1 e) None of the above
3. The following is evidence of Imports
a) GR form b) Bill of Entry c) A4 Form d) QA 22 e) None of the above
4. Maximum repayment period for Housing Loan to NRI shall not exceed
a) 30 years b) 25 years c) 20 years d) 10 years e) None of the above
5 FOREX acquired abroad shall be surrendered to an AD within days of return to India.
a) 30 days b) 60 days c) 90 days d) 180 days
6. The following Account is maintained in Indian Rupees
a) NRE A/c. b) FCNR A/c. c) EEFC A/c. d) All the above e) None of the above
7. Foreign Nationals visiting India as Tourist can open
a) NRE A/c. b) FCNR A/c. c)Domestic SB A/c. d) NRO A/c. e) None of the above
8. Income Tax is deducted out of interest in respect of following Account
a) NRO A/c. b) NRE A/c. c) FCNR A/c. d) All the above e) None of the above
9. A Student going abroad for Studies has been given a
a) Resident Status b) NRI status c) Indian Student Abroad Status d) Foreign National
Status
10.Exchange rates are available from:-
a) Integrated Treasury Mumbai b) F D of the Place c) FEX Cell of the Place d) Any of
the above e) None of the above
11. Quantum of Foreign exchange for travel abroad by a resident is
a) USD 2000 b) USD 3000 c) USD 5000 d) USD 10000 per financial year e) None of
the above
12. How much can a resident Indian carry with him Indian Rupees while travelling abroad?
a) INR 5000 b) INR 10000 c) INR 25000 d) INR12500 e)INR 15000
CANARA BANK | Pre Promotion Test for Sub-staff to Clerk -2014
13. What is the maximum quantum of foreign exchange in the form of currency notes we can release
to a traveler proceeding to USA?
a) USD 2000 or its equivalent in other currencies b) USD 3000 or its equivalent in other
currencies c) USD 5000 or its equivalent in other currencies d) USD 10000 or its equivalent in other
currencies
14. CDF means
a) Currency Declaration Form b) Currency Detail Form c) Currency Description form d)
Current Detail Form
15. LIBOR means
a) London Interest Bank offer Rate b)London Income Bank Offer Rate c) London Interbank Offer
Rate d) Local Inter Bank Offer Rate
16. Non Resident Indian ( NRI ) is the one who is
a) Resident Indian Whose stay is indefinite abroad b) Any resident Indian who stays abroad
for more than 182 days c) Who has gone abroad for business, vocation or employment purpose d)
All the above
17. FEDAI means
a) Foreign Exchange Dealers Association of India b) Foreign Exchange Development Authority of
India c) Federation of Development of Aviation in India d) All the above
18. What is LRS and what is the present limit under LRS?
a) Liberalised Remittance Scheme, $200,000.00 b) Liberalised Remittance Scheme, $
2,50,000.00
c) Liberalisation of Remittance Services, $200,000.00 d) Liberalisation of Remittance Services,
$75,000.00
19. FEMA stands for
a) Foreign Exchange Maintenance Act b) Foreign Exchange Management Act c)
Federation of Management of Aviation d) None of the above
20. Which of the following statement is/are true?
I. NRE, NRO accounts can be opened in INR only. II. FCNR(B) accounts can be opened in 5
foreign currencies in our bank. III. RFC accounts can be opened in 5 foreign currencies in our bank.
IV. EEFC can be opened in foreign currency and not in INR.
a) Only I b) I & II c) I, II & III d) All the above are correct
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 143 | P a g e
FOREIGN EXCHANGE - ANSWERS
1 2 3 4 5
e a b a d
6 7 8 9 10
a d a b a
11 12 13 14 15a
d c b a C
16 17 18 19 20
d 67 b b d
a
ONE LINE QUESTION ANSWER
1. Which debit can’t be allowed in NRE Account? Ans: FTV TOD
2. Benefit of Preferential/additional interest for any type of deposit accounts of NRIs
can be passed on-.True or false? Ans: False
3. Who can not open EEFC account? Ans: Units functioning in SEZ
4. Which type of Accounts can be opened by NRIs coming back to India for permanent
settlement? Ans: RFC
5. In which Currency, FCNR account can not be opened? Ans: None. As per RBI, FCNR(B)
accounts can be opened in all freely convertible currencies.
6. What is the rate of Interest on Loans in INR against FCNR deposits? Answer: MCLR +
0.50% (for Loans upto 90%) ( For loans beyond 90% upto 100% - MCLR +
0.50%+2.00% on the overdrawn liability)
7. Different types of NRO deposits are: Ans: SB, CA, RD, KDR AND FDR
8. Minimum and Maximum period of NRE deposits: Answer: Min 1 year. Maximum – 10
years.
9. Up to what percentage, Inward Remittance can be credited to EEFC Account? Ans: 100%
10. Which type of Accounts can be opened under EEFC head? Ans: Current Account only
11. NRE and FCNR accounts can be opened for a maximum period of ..... Ans: 10 years for
NRE deposits, 5 years for GBP, USD, Euro, AUD & CAD currencies for FCNR
(B)Accounts
12. Which Non Resident Account can be opened jointly with close relative residents? Ans:
NRE, NRO and FCNR accounts
13. Maximum loan amount of Rs 100 lakhs can be sanctioned by the bank against the security
of NRE/FCNR deposits to self and or third parties. True or false? Ans: False. As per IO
Cir 130/12, loans can be granted without any ceiling limit subject to margin
requirements. No pre closure is permitted
14. In respect to FCNR deposits, Exchange Risk is borne by whom? Ans: Banks
15. What is the maximum Interest Rate on FCNR(B) deposits that can be quoted by the banks
? Ans: Libor Rate plus 200 basis points for period from 1year to less than 3 years
& LIBOR+300bps for period from 3 years to 5 years.
16. What is the RFC Term Deposits minimum and Maximum periods? Ans: 1 Month & 3
years (One week and above to less than one month, if the minimum deposit
amount is USD250,000.00)
17. Interest on NRE terms Deposits linked to Libor/Swap. Is it true? Ans: False. RBI given
the freedom to banks to fix the interest rate which should not exceed the rate of
interest offered to Residents for their domestic deposits
18. RFC deposits can be opened in which currencies? Ans: USD, GBP, EUR, CAD, AUD
19. What interest rate to be charged to loan against NRE deposits? Ans: 2% above the ROI
offered on deposits or LIBOR /SWAP rate for the period of loan as prevailing on
the date of grant of loan +2% whichever is higher.
20. Which type of Accounts under NRE can be opened by NRI’s? Ans: SB/CA/RD/FD/KD
21. Whether an NRI can open a joint account with a resident close relative while opening
NRO/NRE/FCNR (B) accounts? Ans: Yes. On former or Survivor basis

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 144 | P a g e
 22. NRD-CSR data is being sent to RBI through XBRL by the banks maintaining Non-Resident
deposit account. What XBRL stands for? Ans: eXtensible Business Reporting System.
23. Who can open NRE account? Ans: NRI, NRIO’s Foreign Born Spouse jointly with NRI
Spouse, Students gone abroad for studies & PIOs
24. Up to what amount can be freely transferred from NRO account per annum out of sale of
properties? Ans: USD1 million dollars per Financial Year after payment of I.Tax
25. What is the limit for allowing over drawings by Overseas/Correspondent Bank/A Category
branches in Nostro accounts? Ans: No such limit
26. What rate of interest to be charged for loans to third parties against FCNR deposits? Ans:
up to 75% - MCLR + 3%. Beyond 75% up to 100% - Maximum ROI MCLR + 7%.
27. What is the minimum period of deposits for accepting Fixed Deposit under NRO account?
Ans: 7 days (for amount Rs.5 lakhs and above), Minimum period of renewal may
be 7 days irrespective of the size of deposit.
28. What is the maximum period, FCNR deposit can be accepted? Ans: 5 years
29. For opening RFC account, what is the minimum period a person should have stayed abroad?
Ans: He should have attained NRI status. That means, he should have resided
abroad for more than 182 days during the previous financial year and should come
back to India for permanent settlement.
30. NRI is going abroad for Medical Treatment. How much amount he can withdraw from his
NRE Account? Ans: Unlimited.
31. Mr Paul is returning to India after staying in UK for 25 years. He is having RS25 lakh
balance in NRO account? Is he entitled to keep these funds in RFC account by converting
into Foreign Currency? Ans: No , the account should be redesignated into normal SB
account.
32. Why NRIs are not allowed to invest in small saving scheme of Post Office? Ans: to
prevent them from executing Arbitrage Operations.
33. Which is the Most popular bench mark rate for Indian Money Market for one day call rates?
Ans: MIBOR
34. Can a Power of Attorney holder raise a loan against FCNR(B) deposit? Ans: No
35. Whether prepayment penalty is there for closure before maturity of FCNR(B ) deposits?
Ans: If closed before completion of 1 year, no interest to be paid. Thereafter 1%
penalty
36. Whether proceeds of the FCNR(B) can be repatriated to 3rd party? Ans: Yes at the
specific request of the Depositor.
37. When NRO account opened on behalf of Foreign Tourists to be closed? Ans: On
completion of 6 months from opening NRO account or before expiry of Visa
whichever is earlier.

38. Whether NRO account of Individual Bangladesh Nationality can be opened without RBI
approval?. Ans: Yes. Bank to satisfy that he is holding valid Visa and Residential
permit . Quarterly report to be sent to Under Secretary, Ministry of Home affairs
with all details like name, date of arrival in India, Pass port no. place of issue,
Name of Foreigner Registration Office , complete address and contact number of
branch. However entities of Bangladesh ownership and Individual/Entities of
Pakistan require RBI approval.(HO 89/2013)
39. Whether repayment of Borrowings by Resident Indians from their Non Resident Close
Relatives are allowed to be credited to NRE/FCNR(B) accounts ? Ans: Yes(IO Cir
33/2012)
40. Whether premature closure attracts penalty of 1% in respect of NRE account? Ans:
Yes(HO 129/12) (1% penalty is waived for Deposit of Rs.1Cr and above which
are accepted/renewed on or after 13.10.2012)
41. Whether NRO funds can be transferred to NRE account instead of repatriating under overall
ceiling of USD1 mio per financial year subject to payment of tax? Ans: yes (IO Cir
60/2012)
42. How much preferential interest can be allowed to Ex-Employee Senior Citizen for NRE/NRO
account deposits? Ans: No preferential interest for any type of deposits of NRIs.
(HO 223/2012)
43. How much Foreign Currency notes can be accepted by the branches for opening FCNR(B)
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 145 | P a g e
 accounts without CO/RO MIP permission ? Ans: USD10000 or its equivalent
44. Whether TOD can be allowed in NRE account? Ans: As per FEMA, Maximum of Rs50000
can be allowed as TOD which should be cleared within 15 days. However it is
subject to delegation Power.
45. Whether TOD can be allowed in NRO account? Ans: As per FEMA, no restrictions
imposed for allowing TOD, but should be cleared within 15 days. This is also
subject to delegation powers.
46. What type of accounts can be opened by Resident Crew members of foreign going
airline/ships earning forex as crew allowances? Ans: RFC (D) account
47. An FCNR account opened by accepting Foreign Currencies if to be closed within 3 weeks and
converted, What exchange rate to be applied ? Ans: FC Buying Rate
48. Foreign Currency Loans granted against FCNR can notbe repatriated. True or False? Ans:
False
49. Who is Persons of Indian Origin? Ans:A Non Resident of Indian Origin holding
foreign Passport.
50. Up to what amount CDF need not be filed? Ans: For Foreign Currency up to USD5000 and
FCs/TCs together within USD10000.
51. Whether a resident account holder can open a domestic account with Non-Resident? Ans :
Yes, Only with close relative as defined in Section 6 of Companies Act,1956 on
Either of Survivor basis.
52. What is lock-in period for Investments made by persons resident outside India in Indian
companies under FDI scheme through investment in equity shares & compulsorily and
mandatorily convertible preference shares/debentures? Ans : Three years for defence &
construction development sector and one year for other sectors.
53. What is the cash withdrawal limit for Add-on Card holders of NRI customers credit card? Ans : Nil
54. What is the cash withdrawal limit for main Card holders of NRI customers credit card? Ans : 50%
of card limit subject to maximum of Rs.50000.00 per month
55. What is the revised limit for Trade transactions allowed under RDA account of
exchange companies? Ans : Rs. 15,00,000.00 per transaction

9.BANKING & TECHNOLOGY

TECHNOLOGY PRODUCTS / SERVICES
ONLINE SUBMISSION OF APPLICATION FOR OPENING SB ACCOUNT
 Web portal created for submission of online Application for opening SB Account for Resident
Indian Citizens holding PAN Card. (SB online facility for opening joint accounts- Cir- 271/2014); NRI
Customers can open Saving Bank Account Online(599/2014)
 One Time Pass Word (OTP) message will be received in the prospect's mobile.
 The prospective customer will receive an e mail with a link to fill up application & submit .
 After the prospect Submits the application successfully he/she will get an e - mail to go to the
branch of his / her choice within 7 days , and submit KYC documents /2 photos and initial deposit of
Rs 1000/
TAB BANKING- OPENING SAVING BANK ACCOUNT THROUGH TABLET (Cir
697/2014 )
 Prospective Customer can make request through Internet, SMS and by calling our Customer
Care. Marketing Officer will facilitate opening of account by visiting customers‘ place Customer data
will be keyed in by MO through TABLET which flows to CBS on acceptance of data by the Branch and
account will be opened. Welcome Kit will be delivered immediately on opening account by Marketing
Officer. Debit Card / Net Banking will be made operational by the branch after opening the account.
Regular Saving Bank Account, Individual A/c under product code 101 can be opened.Facility only
available for Residents who are major (18 years and above). The initial deposit will be minimum Rs
.10000/= and same is payable only through Cheque duly crossed favoring "Canara Bank – A/c
<Name of Account Holder>".
 No Cash is to be accepted as initial deposit by the Marketing Officer. View the requests for their
circle in MO Tracker application.
Sourcing of Applications: By calling Call Center Helpline at 1800-425-0018, By sending SMS as "SB"
to 09289292892,Online Form Filling.
CANARA BANK PAYMENT GATEWAY – ( Cir 217/2015 )

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 146 | P a g e
Customers can choose our Bank Payment Gateway while making the online payments with the
merchants enrolled in our Bank Payment Gateway.

QUICK SB ACCOUNT OPENING (CANARA QUICK ACCOUNTS) – ( Cir 217/2015 )

At CPCs is based on the scanned image of the Account Opening forms uploaded by branches.
ONLINE CHAT – ( Cir 217/2015 ) :Apart from customers/non-customers chatting with our
Customer Care officials, our domestic branches can chat with Help Desk for guidance on their day to
day activities by clicking on the link “Chat with Helpdesk” available in our „CANNET‟.
CANARA E-INFOBOOK ( Cir 100/2014 & 368/2014 ) : It is an electronic passbook
and banking related information facility on Mobile handsets. The facility supports multiple
Operating Systems (Android 2.2 ft above, Windows 8, IOS 7.1 ft above and
Windows/Android/10S TAB ), is Network Agnostic and can be used on all variety of handsets
supporting Internet facility with specified operating systems. The Canara e-Infobook can be
used by all the Canara Bank customers who have registered mobile number with their
accounts. The application will retrieve the details of users on the basis of mobile number itself.
This application is available in 8 languages i.e in English, Hindi, Kannada, Tamil, Malayalam,
Telugu, Bengali and Marathi. The services currently available to customers are: Electronic pass
sheet of accounts (last 10 transactions, last 15 days transactions and last 30 days transactions
for SB/OD accounts and last 25 transactions for Current Accounts), Booking online appointment
for accessing Locker using Android version, Products information, Statement of accounts to
email Ids, Tracking of transactions date wise, Cheque status, ATM locator, Branch locator,
Balance enquiry, Locker operation appointments(for Android version), Accounts summary and
What's new in Canara Bank.
BALANCE ENQUIRY : Facility for the customer to know the balances in their account by giving
missed call from mobile registered with the Bank to 09015483483
RETAIL LOAN SCHEME DETAIL THROUGH MISSED CALL Details through SMS
(455/2015)
09015 637 637 : Home laon enquiry; 09015 642 642 : Car laon enquiry
09015 257 257 : Home laon enquiry for HNI; 09015 778 668 : Home laon enquiry for NRI
AUTOMATIC RECEIPT OF A/C PASS SHEET THROUGH EMAIL : Automatic receipt of A/C
pass Sheet through email at pre determined intervals.
SMS ALERTS FOR CORPORATE NET BANKING USERS ( Cir 398 / 2014 ) : For getting
SMS alerts customer's mobile number has to be registered with the Bank either through the
concerned Branch or through any Canara Bank ATM. At present Bank is sending SMS to the
customers for various activities like, all transactions (irrespective of the amount) through ATM/ Net
Banking / Mobile Banking and for transactions done at branch for more than 25000/-, minimum
balance not maintained, account while transferring account from operative to inoperative and vice
versa, pre/post alert installment and arrears for loan accounts, term deposit maturity, cheque book
issue, pension credits, welcome message for newly opened accounts.

CANARA M-WALLET ( Cir 383/2014; 55/2015 ) : It is designed for making cardless and
cashless transactions safely through the amount assigned to the m-Wallet. This facility provides a
simple and secure way of extending utility payment services through Mobile Phones to Canara Bank
Customers. The customers with their registered mobile numbers can avail this facility. Canara m-
Wallet provides services like: Cardless Merchant payments, Transaction between m-Wallet to m-
Wallet using mobile, Wallet Summary, Mobile Top-ups, Utility Bill payments etc.Designed for making
card less and cashless transactions safely through the amount assigned to the m-Wallet.; maximum
transaction per day per customer - Rs. 1,00,000/- with a monthly cap of Rs. 1,00,000.
CANARA EASY CASH SERVICE ( Cir 438 & 568/2014) : Canara easy Cash service is designed to
serve the migrant population who do not have access to formal banking channels. This service
facilitates fund transfers of small value for this segment of society, giving push to the process of
financial inclusion. This will also benefit student community who will be able to receive funds without
having an account. Canara easy Cash is the instant money transfer (IMT) service that allows our
customer to send money to any user having mobile, with the help of Canara Bank ATM at any time
(24 x 7). The beneficiary need not be customer of any Bank, and can withdraw cash through IMT
enabled Canara Bank ATMs without any card easily and instantly using the One Time Password (OTP)
received through SMS and code shared by the Remitter. The Remitter ,by using ATM card ,has to
enter ,beneficiary‘s 10 digits mobile number , 4 digit remitter‘s code and amount in multiple of Rs
100/-
- The beneficiary has to enter 10 digits mobile number of beneficiary , 4 digit cose shared by remitter
and 6 digit OTP received on his /her mobile ( sent by Bank ) ,in IMT enabled Canara Bank ATM for
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 147 | P a g e
withdrawing the Cash
-Minimum amount per transaction is Rs. 100/- & Maximum amount per transaction is Rs. 5000/-
-Maximum Monthly limit per remitter is Rs. 25000/-
E-lounge: E-lounge is an outlet where basic banking services are made available to the customer at
a convenient / comfortable place on a self operating basis. Customer can avail the banking facilities in
E-lounges are: Cash deposit, Cash withdrawal, Cheque deposit, Passbook updation, On line
transactions through Netbanking (if enrolled for Net Banking). In a nutshell E-lounge is a mini bank
branch operated by the customer himself, without the intervention of Bank staff. It also facilitates as
an outlet for servicing and marketing of banking and banking related technology products with added
convenience to the customer.
CANARA P-SERVE ( Cir 438 & 631/2014 ) : Facility provided through Touch Screen Kiosks
installed in e-Lounges of Canara Bank. It provides personal services platform for the customers in the
e-lounges. The services offered to the customers through Canara P-Serve include:Request to issue
RuPay debit card,Request to issue VISA Credit card, Cheque Book Request,Opening of Savings Bank
account. This can be availed by non customers also,Opening of RD account,Opening of PPF
account,Online Application for Loans,Insurance Products,Mutual Funds,Online Shopping facilities in
collaboration with Dhamaal.com, Expert Opinion from customer care executives through Video Chat
SAFE DEPOSIT LOCKER PACKAGE : RENT COLLECTION ( Cir 383/2014 ) :
Enhancement in SAFE package: (a)Hold Funds in CASA for rent collection, b) Rent Collection through
STP
MISSED CALL BANKING: Customer can get his/her account balance by giving a missed call to 09015 483
483 through his/her mobile number registered with the Bank.
Change of Mobile Numbers used for Missed Call Alert Services ( Cir 465/2015 & 48/2016)
The existing Missed Call Numbers have been changed to the new Virtual Numbers. The old and new
Mobile Numbers for different Missed Call Alert Services are as under:
SN Missed call Service NRI - Missed call no.
no. (48/2016)
1 0 9015 483 483 To Enquire the Balance 0091 9015 483 483
2 0 9015 734 734 To Enquire the last 5 Transactions 0091 9015 734 734
3 0 9015 613 613 To Enquire the last 5 Transactions in 0091 9015 613 613 ( 3 a/cs)
Hindi
4 0 9015 637 637 Home Loan Enquiry 0091 9015 637 637
5 0 9015 642 642 Car Loan Enquiry 0091 9015 642 642
6 0 9015 257 257 Home Loan for HNI Customers 0091 9015 257 257
7 0 9015 778 668 Home Loan for NRI Customers 0091 9015 778 668
PASS BOOK PRINTING KIOSK: In continuation with our efforts to bring in new technology products
in the functioning of the bank, we have introduced "Pass Book Printer Kiosk (PBK)" to select
branches. The Pass Book Kiosk is aimed to increase productivity and performance with high - end
technology. It is convenient and user friendly to use in the bank premises or in a remote location.
With the help of Pass Book Kiosk, customers can print their passbook on their own any time during
the banking hours. The Pass Book Kiosk is a voice enabled machine and easy to use. This will reduce
the time and process of passbook printing in the branches.
CASH DEPOSIT MACHINE: In continuation with our efforts to bring in new technology products and
effective alternate delivery channels in the functioning of the bank, we have introduced "Cash
Deposit Machine (CDM)" to select branches. The Cash Deposit Machine is aimed to increase
productivity and simplify customer needs with the help of technology. It is very simple and user
friendly as a customer can Deposit Cash to any Account of his/her choice from these machines
without waiting in the queue of Cash Counters. The Machine can accept 40 pieces of notes at a time
and it credits the account instantly. This will enable customers to deposit cash on their own, during
the banking hours and thus will reduce the time and process for depositing cash in the branches.

CANARA TECH SUPPORT (CTS) –( Cir -536/2014 & 115/2015 ) : Portal for Lodging CBS
software related queries. Revised procedure for Non-CBS Related Queries. Single Window for both
CBS Software and NON-CBS Technical Support. The Portal is available under Single Authentication
Service (SAS). Existing Remedy Server Application will be dispensed. Portal for Lodging CBS.
Branches/offices can lodge the non-CBS/CBS cases in the portal for redressal of such cases. Non-CBS
related queries can be ledged separately in the following 7 groups-Antivirus & DMS,Internet / Mobile
Banking, Network
Kiosk,Bio-Metric,ATM,Other Applications
Cases lodged by the branches will be available to their Circle TM Section for redressal. Circle TM

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 148 | P a g e
Section has two options- Either they can attend to the issue and reply to the Branch or in case the
issue cannot be resolved by them, the case can be assigned to DIT Wing. Once the case is assigned
to DIT Wing, the case will be automatically assigned to the respective groups depending on the
selection of the icon. In case of other applications, the cases will be directly available to Application
Development & Maintenance (ADM) Group and it will be taken care of by the Group. DIT Contact List
is also provided in the home page of the portal. Software Issues – Dispensing of ―Remedy Server.

NET BANKING: Online Banking at anytime, anywhere through Internet on 24x7 basis. Caters to
both Retail and Corporate customers. Facilities available for Retail Customers are: - View
account details - CASA, Term Deposit and Loan accounts, Printing of transaction details, Fund
Transfer - To Intra Bank ft Inter Bank accounts, Term deposit Opening, Online Tax payment,
Utility Bill payments, Applying for IPO through ASBA, Repayment of installments to own Loan
account, Registration for Mobile Banking facility, Donation to religious and philanthropic Trusts.
Facilities available for Corporate Customers are - View Print account details CASA, Fund
Transfer - To Intra ft Inter Bank accounts and Bulk File Upload Facility. Suitable security and
risk mitigation measures are implemented for Net Banking. Second factor authentication is
ensured through One Time Password (OTP) for beneficiary maintenance and fund transfer. In
updated Net Banking, customers can avail facility of multiple transfer of funds within Canara
Bank, without creating beneficiary. Customers are given an option to access Classic or
Contemporary design Screens. Candigital, an upgraded version of Cansecure, will provide
secured Net Banking environment.

INTERNET BANKING TO CUSTOMERS

Facilities View account details – CASA, TD, Loan Accounts.; Query account activities –
CASA, Loan A/c and other queries; Online Financial Transactions – Intra bank
funds transfer and Inter bank Funds transfer; Online Payment – Tax Payment –
Excise & Service Tax; Other utilities – Bill Payments; Registration of Canmobile
available through net banking; Registration for PassSheet; SMS alerts enabled
LIMITS for transactions exceeding Rs5000/-RETAIL(Rs) CORPORATE (Rs)
FACILITY
PERMISSIBL Funds Transfer - Own Account No Limit No Limit
E IN NET FundsTransfer– Intra Bank – 5,00,000 1 Crore
BANKING Third Party
704/2014
Funds Transfer – Inter Bank – 5,00,000 1 Crore
RTGS Transfer – Inter Bank –
Funds 5,00,000 1 Crore
NEFT
Funds Transfer – Bulk 5 ,00,000 5 Crores
Bill Payment 2,00,000 5,00,000
Discontinuatio To withdraw internet banking facility, he has to give 21 days notice.
n
Ref. Circulars Cir no. 425/2010, 19/2010.,334/2012; 704/2014,476/2015,348 &
MOBILE BANKING:320/2015
Canmobile A mobile banking product to our customers. It is simple,
safe, swift and instant. It is available on GPRS, WAP, USSD and SMS channels. Facilities
available are: - Balance Enquiry, Mini Statement, IMPS Funds Transfer using MMID (P2P),
IMPS Funds Transfer using IFSC (P2A), IMPS Funds Transfer to Merchants (P2M), Funds
Transfer within Canara Bank, Register Beneficiary (For Funds Transfer within Canara Bank),
Generate OTP (For IMPS P2M Pull Transaction), Generate MMID, Retrieve MMID, Cancel
MMID, Cheque Book Request, Donations to Charitable Temples, Trusts, etc, M- Commerce -
Mobile Top-Up / recharge, M- Commerce - DTH recharge, Loan ft Term Deposit Enquriy
(presently in WAP channel), Branch Locator, ATM Locator, Change M-Pin, Manage Self-
Account, Forgot M-Pin, Manage Beneficiary, De-register Account, Change Channel,
Synchronize, Refer a Friend, Feedback, Contact us, Hot-Listing of Debit Card through SMS
(for all bank customers), Hot-Listing of Credit Card through SMS (for all bank customers),
Aadhaar seeding through SMS (for all bank customers), SMS based IRCTC ticket booking,
IMPS Payment Gateway Services [can be used by Mobile Banking customers after going to
any Payment Gateway (viz., IRCTC, etc.) Customers can use the IMPS option for making
payments instead of Credit Card or Debit Card]

CANMOBILE (MOBILE BANKING)

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 149 | P a g e
 Ineligible Joint accounts, Non Resident Accounts; Account/s of HUFs, Trusts, Clubs and
Accounts Associations., Account/s under Court orders/Attachment orders,
Dormant
account/s, Corporate Accounts, KYC non compliant accounts
Limits For Limit Per Transaction Limit Per Day
Funds For USSD/ SMS
Transfer Intra Bank(Within CanaraBank )5,000/- 5,000/-
IMPS – Interbank (To other Banks ) 5,000/- 5,000/-
For GPRS/WAP
Intra Bank(Within CanaraBank)50,000/- 50,000/-
IMPS – Interbank (To other Banks)50,000/- 50,000/-

Ref. Circulars  Cir no.166/2011 ,174/2013,146/2015,546/2015

Banker‘s Balance Daily Monitoring System (606/2014)

Effective Funds Management help in Cost Reduction. Impact on Capital on account of higher Banker‘s
Balances. Capital conservation and optimization to be ensured by maintaining minimum Banker‘s
Balances. Capital saving is the need of hour. Dash Board for monitoring Daily Banker‘s Balances
introduced URL http://172.16.35.15/bankersBalDashboard/Home.aspx in Cannet > Other Links

Canara BillPay. (654/2014) : Canara BillPay facility has been enabled under ―Payments‖ in the
Net Banking Login menu as well as in www.canarabank.in .With Canara BillPay, customer can make
payment to listed billers with their debit card or netbanking credentials

Internet Banking To Customers (FCDB – FLEXCUBE DIRECT BANKING)(Cir 19/2010,

425/2010, 12/2012 610/2014, 623/2014, 677/2014, 685/2014, 145/2015(POLICY)
Online User can be created for Internet Banking through www.canarabank.in. Requirement are ATM
Card, Customer ID or Last Debit or Credit transaction. The site is secured by 128 bit SSL certificate
issued by M/s IDRBT Hyderabad.
WEB BASED MARKETING PORTAL (Cir 442/2014) : Web based marketing portal
www.canarabankemart.com for e-commerce of products /services of MSME Entrepreneurs ,provides
free listing of company‘s profile in directory services ,facilitates MSMEs to showcase products online to
global buyers across the world ,get enquiries for listed products ,upload E-catalogs and market their
product online and to post an event or advertise for their products .
Visa Money Transfer Fast Funds (VMTFF)(Cir 187/2013)
 A facility for Canara Bank Debit Card issued in association with Visa International for inbound
cross border money transfer facility.
 Inbound cross border money transfer facility to our Bank VISADebit Cardholders.
Amount will be credited within 30 minutes of receipt of message at our ATM Switch.
 Full KYC is mandatory.
 NRE accounts are not eligible.
 Credit Cards are not eligible.
 Entire operation is system driven.
Scheme details
1. Only personal remittances from overseas are allowed to the credit of the Cardholder‘s account
linked to the Visa Debit Card in India. The remitter and beneficiary should be individuals only.
2. Transaction amount limit is USD 2500 per remittance and maximum 30 transactions per
calendar year are allowed for a beneficiary. NRE accounts are not eligible under this scheme.
3. Debit Card should be valid and the card should have been issued in full compliance of KYC
norms.
4. Outbound Cross border remittances and also inbound cross border remittances to Credit Card
account are not allowed.
5. Funds will be credited to the beneficiary‘s account linked to Debit Card within 30 minutes of
receiving the message.
6. Our bank earns incremental interchange of US$ 0.80 per transaction.
7. There is no need for the beneficiary to visit the branch, fill up forms or carry documentation as
in the case of other money transferschemes and gets access to money within minutes.
8. KYC/AML/CFT guidelines shall have to be complied in respect of beneficiaries‘ account.
 Presently this facility of remittance is available in the following Banks:
 UAE: Any UAE Exchange outlet
 Singapore: Program launching soon with a leading bank
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 150 | P a g e
  China: ICBC Bank (Net Banking)
 Russia: JSC Russian Standard Bank, Commercial Bank, Moscom Privat Banke. Kazakhstan:
Kazkommerts bank, JSC Halyk Savings Bank ofKazakhstan

E-Trading (Online Trading Facility (OLT)(Cir no.71/2008, 195/09)

 This facility is being extended in association with our wholly owned broking subsidiary M/s
Canara Bank Securities Ltd (M/s CBSL) through their trading portal "CANMONEY.IN".
 For availing OLT facility, a client should have an operative Bank account with one of our CBS
branches, a depository (demat) account with our Bank and a Trading Account with our broking
services.
 The Bank account, demat account and trading account of the client are integrated for
extending hassle free platform to the client for trading in securities. The client, all by himself,
will be able to trade in securities by logging on to the trading portal "canmoney.in" from
"ANYWHERE" and "AT ANY TIME", by allocating funds / securities. After the transactions are
put through, online transfer of funds / securities automatically takes place seamlessly.
 Clients need not write cheques to cover their payment obligations nor tender delivery
instructions for transfer of sold securities.
 The sale proceeds are credited online to the Bank account of the client.
Products offered:

Online Subscription to Mutual Funds - Akin to online subscription to IPO. No paper work either for
purchase orredemption of units. Facility to opt for SIP / SWP and to Switch. Details of complete
holding statement at single page. Value added service without any extra charge (limited period offer).
Online Trading In Futures & Options -Facility to provide margins online. No need to provide
advance
deposits to trade in the segment. Benefit of calendar spread marginsonline. Use of common fund for
cash, FNO and Currency futures.
Online Trading In Cash Segment (Equities): Online Trading In Currency Derivatives
 Seamless trading in both  Facility to clients having forex
Exchanges viz. NSE, BSE.  Varied products like exposure.
Cash N  No documentation / paper work to take
Carry, Intraday, BITSOT. exposures.
 Leverage for day traders.  Lower margins and brokerage compared to
 Facility of product conversion. FNO segment.
 8 hours trading per day from 9.00 am to 5
pm.
Online Subscription to IPOs:
No need to hunt for IPO application forms.
 No need to spend precious time in filling the details.
 No need to write cheques. ASBA facility available.(Application supported by blocked amount)
 No need to visit bidding centres / brokers office to submit application before the cut off time.
 No need to preserve the application stub. Details always available in the site.
 Easy to apply. Client need to key in the number of shares to be applied and rate. Rest of the
contents to be submitted with mere click of mouse.
 Value added service without any extra charge.

ASBA – Application supported by Blocked Amount(Cir no. 313/2010, 589/2013)

 SEBI guidelines:Our Bank has been enlisted by SEBI as Self Certified Syndicate Bank [SCSB] and
as per the guidelines our Bank can act as an SCSB for Capital Issue
 Application to public issues:ASBA is an application containing an authorization to block the
application money in the bank account, for subscribing to an issue
 How it works:In an ASBA process, only the amount to the extent of application money authorized
will be blocked in the bank account. The balance money, if any, in the account can still be used for
other purposes
 Earn interest on Application money If an investor is applying through ASBA, his application
money shall be debited from the bank account only if his/her application is selected for allotment after
the basis of allotment is finalized, or when the issue is withdrawn. The blocked amount will earn
interest and hence the customer need not suffer any interest loss The applicant need not wait for
refund order if there is no allotment of shares. Simply the block will be relased. So that the applicant
can make use of the application money.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 151 | P a g e
 Eligibility:The intending ASBA investors holding account in any of our branches can submit ASBA
application in any of our Designated Branches
 Requirement of D/P ac.:The intending investors need not have their DP
Account with our Bank to use ASBA facility with us.
 Controlling Br:Capital Market Services Branch, Mumbai
 Other features:During block period if a cheque is to be returned when the account shows the
balance but is blocked as per ASBA, the branch has to give reason " Exceeds Arrangement" and
return.
 Joint Account can be blocked, in case the ASBA applicant is one of the authorized signatories
to the account. Garnishee order, Attachment order from Income Tax and other regulatory
authority etc., is applicable on the blocked amount also.
 For extending ASBA facility NSYABA web module is available in all the Branches.(New SYstem -
for IPO - Against Blocked Amount)
Depository Participant Services (Demat Account)(Cir 89/05 656/2014)
 A Depository is an institution which holds investors‘ securities in electronic form. The depository
also provides services related to various transactions in such securities. A depository interfaces
with its investors through Depository Participants. Depository Participants maintain investors‘
accounts (demat accounts) which are similar to Savings Bank/Current accounts with a Bank.
Purchase and sale of securities can be done through demat account. Presently there are two
depositories in India viz., NSDL (National Securities Depository Limited) and CDSL (Central
Depository Services Ltd). Our Bank is a Depository Participant of NSDL.
 PMLA relating to DP services-Circles to address letters to officer / Manager in-charge of DP
service center, nominating him as ANTI MONEY LAUNDERING OFFICER (AMLO). Existing MONEY
LAUNDERING REPORTING OFFICER (MLRO) at Circle Office nominated under PMLA for regular
banking activity shall be MLRO for depository activity also. Concept of "In-Person Verification"
(IPV) which is required for opening of demat accounts is to be adopted. Risk Profiling of DP
clients into Low, Medium and High Risk categories to be done as per HO Circular 89/2005
 (1) Our DP clients are permitted to remit their dues through any of our branches, by
furnishing their eight-digit client id (Demat A/c No.)
 (2) Amounts so remitted by demat clients should be credited to Current Account No. 2442
201 001982 (Canara Bank BG S E B) at our Bangalore Stock Exchange Branch to enable our
Central DP to appropriate the remittances to respective demat accounts.
 (3) Eight digit client id should invariably be mentioned as NARRATION while posting such
credits (656/2014)
E- GOVERNANCE(Cir 327/2011)
 In order to improve the quality and efficiency of the service delivery and to enable the banks to
move gradually towards less paper based transactions, the Department of Financial Services,
Ministry of Finance, Government of India has directed that all Public Sector Banks (PSBs),
Financial Institutions (FIs) and Public Sector Insurance Companies (PSICs) shall take up the e-
Governance. With effect from 1st September 2011, PSBs, FIs and PSICs shall deal with
disbursal/ payments only through direct credit to accounts, excepT for petty cash. This shall
include payments to staff, vendors, suppliers and disbursement of loans and payments towards
instalments and investments.
Online Tax Accounting System (OLTAS-Cir 235/2011)
 Direct Tax Collection data from collecting branches is sent to nodal branches for onward
transmission to Tax Information Network of NSDL through Link Cell, Nagpur through OLTAS
software.
 Funds details are also transmitted through the system for crediting tax collections to Central
Accounts system (CAS) of RBI, Nagpur
 Provision to capture PAN/TAN as per requirement of CBDT is also enabled
 Counter foil to be given to tax payer can also be generated from the system
DESKTOP MANAGEMENT SOLUTION(Cir 42/2012)
Our Bank has implemented Desktop Management System for Centralized Management of computers
and users. Centralised DMS is required in our Bank for:
 Protecting all Desktops, LAPTOPs and Servers of the Bank by using Standard Group Policy
enforcement Solution.
 Distributing the application software, OS and other software updates to the desktops and
Laptops.
 Ensuring that all desktops are with Antivirus solution and also updated with the latest version /
pattern files ongoing basis.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 152 | P a g e
  Ensuring that all desktops and Laptops are updated with the latest O/S updates and patches.
 Maintaining the inventory details of Hardware and software Asset and generate the reports.
 Taking entire control of Desktops remotely and fix the problem.
CENTRALIZED SOLUTION FOR SERVICE UNITS (CSSU) PACKAGE FOR SERVICE UNITS VIZ.
ACCOUNTS/CLEARING SECTIONS AND MAIN BRANCHES(Cir 208/2012,67/2014)
 The CSSU package replaced the existing ASIAS package, working at Accounts/Clearing
Sections.
 ‗Branch Accounts Section' (BAS) Department introduced at Service Units - pre-requisite for
implementation of the CSSU package.
 The Interface between CSSU and CBS is through Straight Through Process (STP).
 The Accounts/Clearing Sections relieved of maintenance of servers, master maintenance and
version control and it would be taken care of at DIT.
 CSSU Day Closure should be done only after ensuring that all the Zones opened in CSSU are
closed and the entries have been pushed to CBS through STP.
 Liquidation of CBS DDs/DWs and RRB DDs through STP has been completed. Day closure in
CSSU should be done on the same day without fail as the STP process checks for the date
sync in CSSU and CBS and the Zones opened for the Previous Day cannot be processed on
the next day.
 The Processing Date should be the same in CSSU and CBS.
Linking of CASA accounts to Direct Benefit Transfer (DBT) Schemes (416/2014): Ministry of
Finance, GOI has directed all Banks to have a separate MIS for all DBT Schemes at the CBS level. In
view of that, required DBT Schemes and parameters are now made available in the CBS.
Procedure: Use CHM63 Options In Flexcube to map various DBT Schemes to the beneficiary‟s CASA
Accounts. An option for linking the CASA accounts to DBT SCHEME in bulk is also provided through
GEFU option ST045. The template of GEFU file can be obtained from TM Section of CO.
Online Loan Application & Status Tracking System (OLTS)( 79/2012, 21/2013,
139/2013,132/2013,80/2013,305/2012, 504/2013, 304/2014 352/2014)
 An internet based web-package which allow clients to logon to our Bank‘s website and to submit
online loan application. The package also allows clients to track the status of their loan
applications.
 For processing online applications received through our Bank‘s website, an intranet web based
package has been enabled by our DIT wing and the same is available under "SAS‖. This is a
three-tier package which can be accessed by authorized users from Head Office(Nodal Office),
Circle Offices (Link Offices), Retail Asset Hubs and Branches(Users) for carrying out various
activities relating to processing of online loan applicationser caption "OLTS – Online Loan
Application & Tracking System
 Administrators have been assigned at all levels to further assign roles to identified officials
 After the client successfully submits online loan application form, the same is available at Nodal
Office for viewing / downloading / further assigning to Circle office. Nodal Office(concerned
Wings at Head Office) after verifying the details of the application will assign the applications to
respective Circle Offices .
 Nodal Officials at Circle Office will have to view the OLTS package daily and view the applications
received. After verifying the details these applications have to be Reassigned to the concerned
RAH /SME Sulabh /AF &PS section or down loaded and the PDF file sent by mail to the branch as
the case may be.
 Besides Circle offices are also need to map these applications to a Customer Relationship
Manager / contact person before assigning. This will help in sending a system generated
message (SMS / e-mail) to the applicant, informing the name of the person to be contacted for
completion of other formalities for processing / sanction of the loan. Circle can map the name of
an official from RAH / Marketing Department and his contact details will be relayed by the
system to the applicant to enable him to approach the designated official.
 Immediately thereafter, the designated contact person at RAH/SME Sulabh should contact the
applicant and extend necessary help / guidance to the applicant to fulfill all the requirements for
sanction. The Status of the applications have to be marked in the OLTS package at each stage by
the concerned Nodal Officials of RAH or by Circle (in case of Branch proposals) so that the
applicant can track the status of his/her application on line. This system is to be followed till
ALPS package is fully implemented by all the branches and Retail Asset Hubs.
Online submission of Application for opening SB Account(Cir 504/2013 ,271/2014 )
 Web portal created for submission of online Application for opening SB Account for Resident &
Non Resident Indian Citizens holding PAN Card
 Personal Data- Mobile No/Date of Birth/ PAN No and e-mail id to be fed & submitted
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 153 | P a g e
 One Time Pass Word (OTP) message will be received in the prospect's mobile.
 The prospective customer will receive an e-mail with a link to fill up application & submit.
 After the prospect Submits the application successfully he/she will get an email to go to the
branch of his / her choice within 7 days, and submit KYC documents /2 photos and initial deposit
of Rs.1000/
 The Branch will receive an e mail regarding the submission SB application of the prospective
customer.
 When the party comes , the Branch has to down load the SB application from Single Sign On
Package & do the needful
 Minors and Staff are not permitted to submit the SB application online
 On line submission of application for SB Joint account facilitated
Online Payment Facility to Customers/Institutions(Cir 93/2013, 222/2013)
 Online payment facility to our customers/Institutions/ corporate/Government bodies in order to
collect payments/fees through online from their customers.
 As we do not have our own payment gateway, the subject facility will be enabled through one of
our empanelled aggregator and the same is chargeable for transaction through our Bank and
other Bank Channels. The charges will vary from aggregator to aggregator based on the
expected transaction volume and the same is not negotiable .
 Bihar State Electricity Board, Patna, Babasaheb Bhimrao Ambedkar University, Lucknow ,
Chamundeshwari Temple, Mysore and IIS Bangalore have been enabled .
 It is cost effective, will pave way for increasing the CASA base, e-transactions and also our fee
based income as the aggregators will be sharing
a portion of the commission earned by them with our Bank for the
transactions put through our Alternate Delivery Channel products like Debit card,Credit Card, Net
Banking etc,.
Advising LC and BG through XMM(Cir 184/2013,22/2013)
 Use of SFMS is made mandatory for sending and receiving all inter-bank and intra bank
transmission of ILC messages with immediate effect & use of SFMS for advising inland bank
guarantee (BG) by issuing bank to the beneficiary through an advising bank.
 ILC and BG are to be necessarily created in FCC package.
 XMM (Xchanging Messaging Middleware) is a secured messaging system procured to
interface Flexcube Corporate and SFMS. Branches have to necessarily create ILCs and BG in FCC
Package as is being done hitherto. Then the user has to login to
http://canaraxmm:8888/CANARAXMM/Login.jsp link to access "XMM Package. Branches
have to process the ILC or BG messages in XMM Application on the same day.
 Necessary clauses to be incorporated in the respective forms and agreements pertaining to ILC
and BG .
 Check for incoming message on day to day basis.
BANK GUARANTEE
Details of advising bank for sending advice through SFMS shall be obtained from the applicant in NF
823 – Letter of request for issue of Bank Guarantee / Extension of Bank.
Before sending Bank Guarantee advice through SFMS to advising bank, Branches have to ensure
correctness of all the details of Bank Guarantee made available in XMM package under "Field 77C-
Details of Guarantee including Beneficiary's name and full address. Branches can correct the above
data if required and also provide any additional information like contract reference number or
notification number, etc., in Field 77C.
Inland letter of documentary credit (ILC) (22/2013,65/2014, 594/2014)
For transmission of ILC message through the XMM Package by the branch, three persons viz., Maker,
Checker (verifier) and Checker(Authorizer) are required. 4 XMM Package will pull data from ILC
lodged in Flexcube Corporate-FCC . The samewill be available in "Repair Message" option in XMM
Package for the users to complete the message. Once authorized in XMM Package, the message will
be moved to SFMS automatically.
4 After the ILC message is sent successfully and acknowledgement is received from SFMS Gateway,
XMM application can be configured to send e-mail to the customer along with "Transmitted copy" of
ILC message in PDF format".
4 Amendment to Inland Documentary Letter of Credit is also required to be transmitted through
SFMS.
4 Incoming LC messages from other branches/Other Bank branches will flow to XMM, Application
through SFMS and any branch user including 'Maker' can take a printout of the incoming message.
Branches should not negotiate ILCs issued in physical form from 1st January 2015. Report
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 154 | P a g e
of Pending ILC Messages in ―XMM Package‖ is made available in Business Objects – Report
No. 110029.
Accountability will be fixed on the persons responsible for issuing/negotiating ILCs in
manual format (594/2014)
All Inland LCs (ILCs) & Domestic Bank Guarantees (BGs) shall be routed through SFMS. Originating
branches shall collect 100 plus taxes per message from the customer for transmitting ILC/ BG
message through SFMS. Introduction of New Direct Non-Implemented GL -- 209272718 (SL SFMS
FEE IDRBT) for crediting SFMS charges recovered from the borrowers for each originating Inland
LC/BG transaction transmitted through SFMS. Corporate Credit Group-III, shall be the nodal agency
for monitoring and
making payment to IDRBT (554/2014)
Digital Signature /Certificate (459/2015)
 e-Token: Hardware used to store digital signature
 Digital Signature: Digital key used to authenticate exchange of message or documents
 Class II certificate : Used by individual for the purpose of signing
Class III certificate: Used in server
REAL TIME GROSS SETTLEMENT (RTGS): A Real time, secure payment mode, processed and settled
simultaneously. Each payment instruction is handled individually. The processing and settlement is on real
time basis from 8 AM to 4.30 PM for customer payment on all working days. Inter Bank payment timing is 8
AM to 7.45 PM on all working days. Payment is final and irrevocable and the receiver can utilize the funds
immediately. Minimum funds transfer Rs.2,00,000/-. Straight Through Process (STP) is implemented for
automatic accounting and settlement of RTGS transactions. Facility has been extended in all our branches
and Administrative Offices. The RTGS facility can be used for direct credits to loan accounts.
NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT): An efficient, secure, economical and expeditious
Inter-Bank funds transfer and clearing system. No minimum limit for transactions under NEFT. The
processing and settlement is hourly basis from 8 AM to 7 PM. Straight Through Process (STP) is
implemented for automatic accounting and settlement of NEFT transactions. Facility has been extended in all
our branches. NEFT facility is extended to the two sponsored Regional Rural Banks. NEFT facility can be used
for direct credits to loan accounts. Walk-in customers who do not have an account with remitting bank can
send remittance through NEFT upto Rs.50,000/- by paying cash. One way remittance facility from India to
Nepal through NEFT with a ceiling of 250000/- and maximum of 12 remittances in a year is available.

Debit & Credit Cards

1. International Travel prepaid Card: Multicurrency (USD, GBP ,EUR,CAD,AUD,SGD & AED)
prepaid card with reloadable option having 5 years validity. Buffer amount is US $ 10. Kit
contain two cards, one is primary and second is backup card. Sale fee is Rs 200 , Reload fee is Rs
50 and Encashment charges are Rs 100/- . Card cannot be used in India, Nepal, North Korea,
Iran and Cuba

2. Canara World Credit Card: In association with Master card. Printing customized background
on the card. Minimum net annual income Rs 7.5 Lacs. Card limit Rs 1-25 Lacs .Card issuance fee
is Rs 2000/- ,Annual fee : Nil , Inactivity fee: RS 1000/- p.a. ( Min annual turnover of Rs 50000/-
not achieved ).Accidental Insurance Cover is Rs 2-8 Lacs.Cash withdrawal limit Rs 50000/- , Csh
withdrawal charges : Rs 30 per 1000/-, Baggage Insurance & Purchase protection : Rs 25000/- ,
Lost Card liability : Nil . Rewards Points : Rs 0.50/Rs100 .

3. Business Debit Card – Global: In association with Master Card ( BIN 529819) . Non Photo
card. Meant for SME segment .OD and CA customer with Individual and proprietor constitution. Valid
for 10 years. Inactivity fee is Rs 300/- ( No fee till 25.02.18 , Min annual turnover Rs 50000/- , 20
% variation may be considered in turnover ) .Cash withdrawal limit is Rs 50000/- , Purchase
transaction limit Rs 2 Lacs. Lost card liability upto Rs 5 Lacs covered from the time of intimation to
the bank, in excess of 1 % of the claim amount or Rs 2000 whichever is higher. Misuse of
counterfeit card on net banking: Rs 20000/- Misuse for air ticket purchase: Rs 50000/-. Reward
point Rs 0.50 / Rs 100. Annual and enrollment fee : NIL , Replacement : Rs 50 . Hotlisting Rs 150/-.
Accidental Insurance Cove Rs 2-8 Lacs. Purchase protection and baggage Insurance : Rs 25000/-

4.Rupay Platinum Debit Card: Average quarterly balance : Rs 50000/- or purchase transaction
by Canara Bank debit Card to the tune of Rs 50000/- during previous 12 months. Cash
withdrawal limit Rs 50000/-. Purchase limit Rs 2 Lacs. Complementary insurance cover upto Rs 2
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 155 | P a g e
 lacs against risk of death and permanent disability.Accidental Insurance cover Rs 2-8 Lacs.
Annual fee : Nil , Inactivity fee : Rs 500/- ( turnover less than Rs 50000/- or balance below Rs
50000/- ) . Lost card liability : Rs 5 Lacs.

5. Canara Global Credit Card/ Classic- Visa /Standard- Master: Min income Rs 1 lac p.a. ,
Staff Rs 60000/- , Inactivity fee Rs 400/- ( turnover below Rs 12000/-) .Free add on card (
Inactivity fee Rs 300/- turnover Rs 12000/-) Card limit : 10-30 % of annual gross income ( Min
Rs 10000/- & Max Rs 3 Lacs ) . Cash withdrawal Rs 50000/- ( Max 50 % of card limit). Accidental
Insurance Cover Rs 1-4 Lacs.Baggage insurance Rs 25000/-Hotlisting fee Rs 300/- .Free
duplicate card

6.Canara Gold Card : Minimum Income Rs 2 Lacs . Card limit 30 % of annual gross income .Rs
50000- Rs 25 Lacs.No enrolment fee. Inactivity fee Rs 750/- .( for turnover below Rs 25000/-) .
Hotlisting fee : Rs 300/-. Free duplicate card.

7. Canara Corporate Card: Enrolment fee is Rs 250/- . Card limit: Rs 50000- Rs 100 Lacs & in
multiples of Rs 5000/- Cash withdrawal limit: 50 % of card limit → Max Rs 5 lacs , per add on
card withdrawal limit Rs 25000/- . Max add on cards 99.

8.Canara Visa international Gold Card :Valid for one year . Min US$ 3000 ( Gross annual
income Rs 2-4 Lacs) , Max US$ 15000 ( Gross annual income Rs 10 Lacs & above )

9. Canara Non personalized Credit Card: It is standard master card variant with 3 year
validity. Max Card limit is Rs 3 lacs. Max cash withdrawal limit is Rs 50000/- Issuance charges
are Rs 250 which are waived till 31.3.2017
10. EMV CHIP Cards: Valid for 5 years . Charge for issuance: Rs 250
ASBA: Canara Bank is permitted by SEBI to offer ASBA (Application Supported by Blocked Amount) services
as a Self Certified Syndicate Bank (SCSB). ASBA facilitates the investor to subscribe for IPO/FPO/Rights
issues, containing an authoriRs.ation to block the application money in his / her CASA account. ASBA
application can be submitted at any of the branches of our Bank. Retail IMB customers are eligible to apply
for ASBA online through Internet Banking. The investor continues to earn interest as the application money
lies in his / her account. For details of the facility, log on to our website www.canarabank.com.

CANARA BANK CALL CENTRE: Our Bank is providing Call Centre Services under Toll Free Number 1800
4Rs.5 0018 round the clock i.e. Rs.4xRs. except 3 National Holidays. Customers/Non-customers can get
various product and account related services from Call centre.

CANARA BANK WEB CHAT/CHAT WITH US: "Chat with us" is an online Chat service available on
Bank's website, www.canarabank.com, for customers/Non-customers to clarify their doubts/queries
instantaneously by chatting with the Customer Service Desk of the Bank.

TWITTER: Canara Bank is active on social networking website 'www.twitter.com'. The official Twitter
handle of Bank is www.twitter.com/canarabanktweet. Customers can follow Bank's Twitter handle for
information on our products/services and latest happenings in the Bank.
E-TAX PAYMENTS: Canara Bank e-tax facilitates Direct Tax payments, Indirect Tax payments (Customs,
Excise Duty and Service tax), Commercial Taxes/Sales Taxes for the States of Andhra, Bihar, Delhi, Dadra
& Nagar Haveli, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, Punjab, Telengana, Tamil Nadu & West
Bengal through Internet. Facility is made available on Rs.4xRs. basis to all our Net Banking Customers.

ONLINE TRADING FACILITY (OLT): Canara Bank offers OLT facility in association with M/s Canara Bank
Securities Limited (A wholly owned subsidiary of Canara Bank). For details log on to www.canmoney.in or
www.canarabank.com
PUBLIC PROVIDENT FUND (PPF, 1968) / SENIOR CITIRS.EN SAVINGS SCHEME (SCSS,
2004) & SUKANYA SAMRIDDHI ACCOUNTS SCHEME: Canara Bank acts as an agent by accepting
subscription for PPF/SCSS as well as SSA schemes of Govt. of India in 34Rs.3 authoriRs.ed branches.
RBI SAVINGS BONDS Rs.003 (8% TAXABLE): Govt. of India has introduced 8% Savings (Taxable) Bonds,
Rs.003 for the benefit of resident Indians which is being operated through 49 authorised branches of our
Bank across the Country.
NATIONAL PENSION SYSTEM (NPS) - SWAVALAMBAN SCHEME (CORPORATE MODEL) & ATAL
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 156 | P a g e
 PENSION YOJANA: The Schemes are initiatives of Government of India, making pension possible
for all and has been implemented in all our authoriRs.ed branches.
OTHER SERVICES:
REMITTANCE FACILITIES
 Rupee drawing arrangements with 36 Exchange Companies in Middle-east and Rs.5 Banks across globe for
remitting funds by NRIs from abroad.
 REMIT MONEY - a web based remittance product for NRIs available in UAE, QATAR, BAHRAIN, OMAN,
KUWAIT and SAUDI ARABIA. This facility is also available in our branches abroad located in UK, CHINA a
HONG-KONG to remit money in a fast, safe and secure mode to our branches in India.
 FLASHremit - NRIs in UAE can remit to beneficiary's account maintained at Canara Bank in real
time through UAE exchange centre outlets in UAE and this instant account credit facility is
available for Rs.4xRs.x365 days.
 Instant Remitmoney - an instant account credit facility introduced by our Bank for NRIs in Gulf region to
provide hassle free Remittances on a real time basis, Rs.4xRs.x365 days to the Beneficiaries account
maintained at Canara Bank in India.

 We are the Sub agents for Western Union Money Transfer Services, wherein NRI can remit funds from any
part of the world to his relatives/friends subject to a cap of USD Rs.500 per remittance and maximum of 30
Lockbox service is available for NRIs based in USA.
 Arrangements have been made with M/s Deutsche Bank AG for utiliRs.ing their product 'FX4Cash Multi-
Currency Payments Solution' through which our Branches/Offices can execute payments in more than
116 non-position currencies through the existing USD account maintained with Deutsche Bank AG and
credit to beneficiary's local currency account as per the instructions of the customers / remitters.
OTHER FACILITIES TO NRIs
 All types of loans under Retail Lending Schemes of the Bank. All types of Retail Loans including Housing
loan availed by NRIs can be repaid by their close relative in India from their account.
 Loans against NRE/NRO term and FCNR deposits for personal needs subject to usual margin
requirements.
 Credit Card facility.
 Safe custody services and safe deposit lockers facility.
 Portfolio Investment Scheme available in 18 select branches.
DEPOSITORY SERVICES: As Depository participant of National Securities Depository Limited, we
offer all kinds of depository services through service centers. For details, log on to our website
"www.canarabank.com".
SAFE DEPOSIT LOCKERS: Lockers available at select branches where Safe Deposit Vaults are installed. Bank
lets on hire, safe deposit lockers to individuals (Singly or jointly), Firms, Companies, Association or Clubs,
Trustees on nominal rent.
SAFE CUSTODY SERVICES: This subsidiary service is rendered by the Bank to most valued customers.
Bank undertakes the responsibility of safe custody of articles entrusted by the customer under a contract
and return the same according to terms agreed upon.

Observance of June 15th, 2016 as ‘Maha Log-in Day’ for Canara International Travel Prepaid
for promotion of Canara International Travel Prepaid Card product in 411 identified Branches Each
Identified branch shall issue a minimum of two Canara International Travel Prepaid Card on the
`Maha Log-in Day’.Exclusive e-mail id for any clarification/support:
[email protected]. ‘Canara Bank International Prepaid Travel Card’ was launched in
March 2015 designed specifically for persons travelling abroad & students pursuing studies abroad.
The modalities Et scheme guidelines were detailed in HO Cir 117/2015 dated 10.03.2015.

TEST YOURSELF : BANKING & TECHNOLOGY

1. Cash requirements of Bank’s customer can be met round the clock (24 x 7 hrs) by
a) AWB b) ATMc) MTSS d) None e) All
2. Debit/ATM card is being issued to eligible customer of our Bank
a) Students above the age of 16 years b) Joint a/c – operation condition severally c) Joint a/c
– operation condition Jointly d) None e) All
3. CANSPEED is
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 157 | P a g e
a) A product of our Bank for inter-bank funds transfers facility through RTGS system using
SFMS. b) A car loan scheme c) Fast cheque collection system d) None e) All
4. In Core Banking Solution (CBS) system –
a) Branches are connected to a central server b) Transaction can be done at any of such
branch c) Customer has choice of different types of services at any of the server Branches d) All
the above e) None of these
5. ATM provides –
a) Round the clock service b) Anytime Money Facility c) Quick & efficient services d) All the
above e) None
6. Information Technology has resulted in
a) Improved efficiency b) Innovative Products c) Effective Delivery System d)Enhanced
Productivity e) All the above
7. Our Bank's Dept. of Information Technology (DIT) is situated at
a) Head Office, J C Road, Bangalore b) Head Office, Annexe, Naveen Complex, M G Road,
Bangalore c) Hyderabad CO d) Mumbai e) None
8. The physical parts/components of a computer are known as –
a) Software b) Hardware c) Fixed ware d) None e) All
9. Which of the following numbers are used in the binary number system –
a) 0 – 9 b) 0 - 10 c) 1 & 0 d) 2 e) None
10. Returned OSC instrument to be preserved at branch for how many days?
a]To be handed over to customer or send to customer by regd. post b] No such things c] 6 months
d] 10 months e] All the above
11.A set of programme which tells the computers what to do and when to do are known as a)
Hardware b) Software c) Modem d) Mouse e) None 12.Which of the following is storage device?
a) Floppy b) CD c) DAT d) All e) None
13.Which of the following component of a computer is known as Brain of computer –
a) CPU b) Monitor c) Mouse d) Printer e) None
14.Which of the following is an output device –
a) Printer b) Mouse c) Keyboard d) All of these e) None
15.Process of starting a computer is known as
a) Booting b) Browsing c) Beeping d) Backup e) None
16.Storage of data from a system to a floppy/CD for future use is called
a) Backup b) Booting c) Abort d) Closing e) None
17.www is known as –
a) World Wide Web b) World Wise Website c) Bank’s Website d) All e) None
18.A computer that co-ordinates all computer activities into a network is known as
a) Server b) UPS c) Modulator d) LAN e) None
19.A computer programme written with Bad Intention is called
a) Virus b) CD c) DAT d) None e)All
20.OLTAS package is used to –
a) remit taxesb) fund transfer c) issue DD d) None e) All
21. Which of the following is also known as plastic money –
a) Debit card b) Cheque c) DD d) Smart Card e) None
22. The computer output that is printed on a paper is called ---
a) Soft copy b) Hard copy c) Electronic copy d) Text Copy e) None
23. In centralized computer environment customer can know the balance of their account by
a) ATMb) Mobile phone c) Internet d) All of them e) None
24. Branch advice printing is stopped after 100% CBS of our branch/offices.
a)Yes b) No c) Print to be taken every day d)All the above e)None
25. Transfer of funds by customers without bank’s intervention, can be done by
a) IMB b) Telephone c) End d) FAX e) None
26. Persons residing abroad can send money to their families in India by fastest mode through
a) Western Union Money Transfer b) DHL courier c) STD call d) Fax e) None
27. Which of the following Package was first introduced in our Bank?
a) IBBS b) Bancs 2000 c) ALPM d) CBS e) None of these
28. The advantages of Computer are
a) Speed b) Accuracy c) Storage d) All of these e) None of these
29. The Computer can perform which of the following functions
a) Addition b) Subtraction c) Comparisons d) All of these e) None of these
30. CPU stands for - a) Core Packing Unit b) Core processing Unit c) Central Processing Unit
d) None of the above e) Computer Processing Unit
31. Which of the following is not a Hardware Component of a Computer?
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 158 | P a g e
a) Motherboard b) Monitor c) Printer d) Windows e) Keyboard
32. is also known as the Electronic Finger of the Computer?
a) Keyboard b) Mouse c) Monitor d) Printer e) None of the above
33. UPS stands for
a) Uninterrupted Power Supply b) Under Power Supply c) Unix Power Supply d)
Unstopped Power System e) None of the above
34. DOT MATRIX is a type of
a) Software b) Scanner c) Printer d) Monitor e) None of the above
35. ATM stands for
a) Automated Teller Machine b) Automatic Tailoring Machine c) Auto Token Machine d)
Anywhere Teller Machine e) None of these
36. Letters / File can be sent electronically through cost effective manner
a) Courier b) Tappal c) e-mail d) Speed Post e) None of these
37. The commission for NEFT facility to Customers is:
a) Up to 1 lakh –Rs.NIL b) Up to 2 lakhs –Rs.15 c) Above 2 lakhs – Rs.25 d) All the above e)
None of the above
38. The concept of sending / receiving text on computer network is called
a) On line database b) e-mail c) teleconferencing d) teleprinting e) fax
39. A word processor can be used
a) To edit document b) To prepare letters c) Print documents d) all of the above e) None of
the above
40. A Computer can be used for
a) Anything that a human being cannot do b) Anything which a human being can do c) Doing
calculations only d) Computing, storing, comparing and retrieving data e) None of these
41. The linking of Computers with telephone is done by
a) MODEM b) Pairing c) Interfacing d) Assembling e) None of the above
42. When various Computer Devices are linked at different buildings of a branch /offices are called
a) LAN b) MAN c) V- SAT d) WAN e) None of the above...
43. A Computer generally processes
a) Information b) programme c) Data d) Output e) None of the above
44. The software used by the Computer for booting or starting is called:
a) Input software b) Virus c) Application Software d) Operating Software e)
None of the above
45. Full form of ECS
a) Electronic clearing services b] Course code c] Computer name d] Printer name e] All
the above
46. The Signature of a Customer can be captured by
a) Keyboard b) Scanner c) Mouse d) None of the above e) All of the above
47. The process of protecting data from unauthorized Users is called
a) Data Security b) Data Encryption c) Data Validity d) All of the above e) None of
the above
48. Software used for writing letter/text is
a) MS Word b) Editing c) Updating d) Calculating e) None of the above
49. MS Windows is
a) Hexagonal System b) Operating System c) Trinary System d) None of the above e) All
the above
50. Which of the following attributes cannot be attributed to computers?
a) High Speedb) Accuracy c) Versatility d) Emotions e) None of the above
51. Different types of picture appears on desktop in WINDOWS environment is known as
a. Icon b. Picture c. Object d. None of these e. All of these
52. Payment of dividends to a large number of shareholders of a company electronically can be
possible by -
a. ECS (Credit) b. AWB c. ATM d. Cheque e. None
53. Different computers in the same building can be interlinked by using
a. Local Area Network (LAN) b. WAN c. MAN d. All of them e. None
54. CANNET is –
a. Internet b. Website of our Bank c. INTRANET of our Bank d. I&MB Facility of our
customers e. None of the above
55. Buy now & Pay later is the facility available under
a. Debit card b. ATM card c. Credit card d. All of these e. None of the above
56. User id and is required to enter into a package
a. Key b. Staff No c. Password d. All the above e. None of the above
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 159 | P a g e
57. Following is an input device
a. Key board b. Mouse c. Scanner d. All the above e. None of the above
58. Data Centre for CBS is located in
a. Mangalore b. Bangalore c. Mumbai d. Hyderabad e. New Delhi
59. Maximum amount that can be drawn through ATM per day is Rs.
a. 10000 b. 25000 c. 20000 d. 18000 e. 50000
60. The Website of our Bank is
a. www.canbank.com b. www.canarabank.com c. www.canarabank.org d.
www.canbankindia.in e . None of the above
61. Minimum amount for sending through RTGS is Rs.
a) Rs.1 lakh b) Rs.2 lakhs and above c) Rs.5 lakhs d) Rs.10 lakhs e) No Ceiling
62. NEFT settlements per day on Normal day ie other than Saturday
a) 6 b) 4 c) 11 d) 8 e) 12
63. What is the maximum amount per remittance in case of NEFT NEPAL? Workers Remittance
Scheme:
a) Rs.50, 000/ per month b) Rs.1, 00,000/- per month c) Rs.25, 000/- per month d) No such
ceiling e) Cannot remit
64. What is the commission on RTGS (9am to 12.00 noon) amount of more than Rs.5 lakhs
a) Rs.5/- b) Rs.10/- c) Rs.15/- d) Rs.25/- e) Rs.50/-+ST
65. How many transactions are free for usage of our Bank’s SB account debit card in other bank ATM?
a) 5 b) No Charges c) 10 d) 15 e) No limit
66. ATM Cash loading to be done by whom?
a) Any two employees one not below the rank of officers b) Armed Guard c) Currency Chest
d) None e) All the above
67. In CBS, Cash withdrawal in other than home branch can be by way of ?
a) Cheque only b) Withdrawal order form only c) Not paid d) No restriction e) none of the
above
68. Whether duplicate pass book for SB account holder s can be issued in CBS?
a) To be issued manually b) It can be issued in CBS c) No duplicate pass book d) All the
above e) None
69. The Toll Free No 1800 425 0018 connects
a) CBS help desk b) Customer toll free number c) Complaints phone d) Government of
India e) None
70. Compulsory leave in a year to be lodged in
a) HRMS package b) To be manually maintained c) Maintained in CBS d) Any of the
above e) None of the above
71. Processing of monthly salary of employees is done through
a) NSDL site b] HRMS Package c] Email d] Demand Draft e] Any of the above
72. For issue of debit card is mandatory
a) PAN b) Form60 c) Form61 d) PAN or F60 or F61 e) None of the above
73. Whether joint account holder can be issued with Debit card?
a) Yes b] No c) Yes with operation condition severally d] Yes with operation condition jointly e ) Both
C&D
74. Whether KYC details to be fed in the CBS system?
a) Yes b) No c] Case to case d] Only VIP customers e]Manually maintained
75. What is max limit for cash payment at POS?
a] 1000 b] 2000 c] 5000 d] 25000 e] None
76. Whether charge is there for Pass Book Updation at other than non base branch
a) No charges b) To be charged Rs.10/- c] No Updation possible d] To be charged Rs.20/- e] none
77. NNND package is maintained in
a) CBS b] ALPM c] Manually d] No scheme now e] Cannet
78. KISSAN OD account is to be opened
a] Manually b] In CBS system c] Not to open Kissan OD d] ALPM e] None
79. As on date Cash BARs in CBS to be responded a] No time limit b] Within one week c] On the
same day d] One month e] Not to be responded
80] Eligibility for Internet banking facility
a] Only to VIP customers b] No such facility c] Customers having mobile phones and Mob
No. registered in CBS d] Only eligible for staff e] None of the above
81. ETDS refers to what
a] Electronic TDS b] English TDS c] Company name d) All of these e) None of these
82. Personalized undelivered cards to be
a] Sent to Circle Office. b] Returned to DIT c] Handed over to customer d] Destroyed in 3
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 160 | P a g e
months e) None of the above
83. After CBS, slip bundle is maintained
a] No slip bundle b] Scheme wise c] Teller wise d) Branch wise e] None
84. In CBS system, how to handle OSC?
a) To be lodged in CBS b] To be sent manually c] No OSC at all d] Sent to C O e) None
85. Excess cash during closing of cash to be credited to
a] Sundry Liab. GL b] No need to enter in system c] Maintain book only d) Maintain Manually e]
None
86. ATM complaints if any to be resolved in how many days?
a] 7 days b] No limit c] No complaint to be accepted d] 30 days e) None
87. RTGS means
a] Real Time Gross Settlement b) Company name c] Police authority d] Wing at HO e) None
88. Password of HRMS to be
a] Kept secretb] shared with neighbour c] Kept with only officers d] Kept with manager e) None
of the above
89. Suspended account in CBS system refers to
a] Loan Accounts b] Staff a/c c] Customer account d] NPA account e) None
90. Mobile banking refers to
a] Opening Mobile phone Company Account b] call manager
by mobile c) Doing Bank transaction using
mobile phone d) All the above
e) None of the above
91. FCC refers to
a] Flex cube company b] Flex cube corporate c) All Company Accounts
d) All of these e) None
92. NB164 used in our Branches is used for
a] BAR register b] User Profile Maintenance Register
c] Computer Note Book d] All the above e] None
93. HRMS login is done using password of ....
a]Individual Self b] Manager c] Clerk d] Sub staff e]None
94. CBS node is connected to Central Servers from branch via
a] Leased Line b] Not connected c] Current Wire d] All the above e] None
95. Customer Terminal in a branch is meant for
a] Customers b] Currency Chest c] Circle Office d] Head Office e] None 96. When connectivity fails in
CBS branches , We need to do the following
a] Call TM Sec / NAP Centre b] Keep idle c] No action required
d] All the above e] None
97. LOR / AOD obtained to be updated in .................
a] FCR b] FCC c] HRMS d] EMAIL e] Manually maintain
98. List of computers in a branch available in .........
a] NB164 b] NB9 c] Cash book d] Inventory Book e] Nearby branch
99. Mandatory reports in CBS means
a] Compulsory reports to print and preserve b] Stock Room
c] CBS computer d] Key board e] Slip Bundle
100. In CBS , Current account for businessman can be opened - True or False
a] False b] True c] 50% true 50%false d] only SB can be opened e] only RD can be opened
101. Validity of Personalized & Non Personalized card
a] 10 Years b) 10 & 3 Years c] No Validity d] 5 Years e) None
102. RuPay Debit card ( Which is Incorrect)
a] Domestic b) Global c] Valid for 10 years d] Can be linked to 4 accounts e) None
103. Platinum Debit Card – Cash withdrawl limit from ATM :
a] 25000 b) 20000 c] 50000 d] 40000 e) None
104. Mobile banking (CanMobile) can be issued to
a] NRI b] JOINT A/C c) INDIVIDUAL (SB,CA,OD A/C) d) All the above e) Both a & c only
105 Facilities under Internet banking ( Which one is correct)
a] Opening of RD Account b] Opening of FDR/KDR/SHIKHAR Account c) Opening of SB
Account
d) Opening of Loan A/c e)None of the above
106. ASBA means
a] Application supported by Blocked account b] Application supported by Blocked amount c)
Application supported by Blocked Demat account d) Application supported by Blocked
Arrangement e) None of the above
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 161 | P a g e
107 . IMPS means
a] Interbank Mobile Payment Service b] Immediate Payment Services c) Both are correct
d) Either a or b is correct e) None of the above
108 Find the Odd man out
a] Max Amt can be transferred throu mobile Banking 50000/- b] Max Amt can be transferred
throu Net Banking Retail 200000/- c) Max Amt can be transferred throu Net Banking Corporate
5000000/- d) Max Amt can be transferred throu FCR - No limit e) None of the above
109 Facilities under Internet banking ( Which one is correct)
a] UPDATE/VIEW AADHAR No b] Hotlisting of Debit Card c) Creation of SI for Loan
Repayments d) Stop Payment e) All are correct
110 . CTS means
a] Cheque Truncation System b] CT Scan c) Cheque Truncation Software d) Cheque
Transaction Service e) None of the above

ANSWERS
1 2 3 4 5 6 7 8 9 10
b e a d d e b b c a
11 12 13 14 15 16 17 18 19 20
b d a a a a a a a a
21 22 23 24 25 26 27 28 29 30
a b d a a a c d d c
31 32 33 34 35 36 37 38 39 40
d b a c a c d b d d
41 42 43 44 45 46 47 48 49 50
a d c d a b b a b d
51 52 53 54 55 56 57 58 59 60
a a a c c c d b b b
61 62 63 64 65 66 67 68 69 70
b e a e a a a b b a
71 72 73 74 75 76 77 78 79 80
b d e a a a b b c c
81 82 83 84 85 86 87 88 89 90
a d c a a a a a d c
91 92 93 94 95 96 97 98 99 100
b b a a a a a d a b

101 102 103 104 105 106 107 108 109 110
a b c c c a a b e a

GENERAL
The Official web site of Canara Bank is www.canarabank.com
 'www' means World Wide Web
 The Intranet site of Canara bank is called as CANNET
 First page of Website is termed as Homepage
 'CANARA BLOG', is a website designed to share information of our Bank staff and accessed
at http://sp.canarabank.com/canarablog
 To view information on the web you must have a web browser
 The most common tool used to restrict access to a computer System is User logins /
Passwords
 strong password should have Alphabets Numerals and 8 characters
 Hardware or software designed to guard against unauthorized access to a computer
network is known as firewall.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 162 | P a g e
  Biometrics is the measurement of things such as fingerprints and retinal scans used
for security access

 E-token is used for ROC- MCA 21 authorization & CERSAI Authorization

 The scrambling of code is known as A. encryption

 Codes consisting of lines of varying widths or lengths that are computer-readable are
known as a bar code
 @ # ? * are known as special characters
 User can keep your personal files / folders in My Documents
 A DVD is an example of an optical disc
 By viewing the properties of the local hard disk of a computer, the user can find out the
amount of space that has been used up and the remaining free space on the
disk.
 Different documents can be open at any one time - as many as your computer memory
will hold
 A pre-made document, which has coordinating font, layout and background, is-
Called Template
 Saving is a process- To copy the document from memory to storage medium
 Net Meeting is Remote desktop connection under DMS environment which is used for
troubleshooting purpose
 Bank's call centre can handle customers' request in 7 languages
 The process of transferring files from a computer on the Internet to your computer is
called downloading
 Ctrl + Alt + Del command is given to reboot the computer
 To shut down a computer, Click on start button and then click on shut down

VIRUS
 a malicious program which causes damage to the data.
 The ability to recover and read deleted or damaged files from a criminal's computer is an
example of a law enforcement speciality called computer forensics
 Malicious software is known as malware
 Junk e-mail is also called spam
 Phishing are attempts by individuals to obtain confidential information from you by
falsifying their identity thru mail
 A person who used his or her expertise to gain access to other people's computers to get
information illegally or do damage is a hacker.
 Canara Bank has an Anti-Virus solution from Symantec Company
UNITS OF COMPUTER DATA
Computer data is stored in Bytes
 8 bits = 1 byte
 1024 bytes = 1 Kilobyte
 1024 KB = 1 Megabyte
 1024 MB = 1 Gigabyte
 1024 GB = 1 Terabyte
 1024 TB = 1 Petabyte
 1024 PB = 1 Exabyte
 1024 EB = 1 Zettabyte
 1024 ZB = 1 Yottabyte
CBS DAILY ACTIVITY
 Branch Batch Open -6001 : This is the first activity in the morning. i.e. like Start Day Operations
in IBBS. This activity can be performed by Branch-in-charge (User Template 80) only.
 Vault Batch Open - 9003 (USER ID V<Staff No>) : This option is the second activity
i.e . like opening of double Lock. This activity can be performed by vault user/Cash supervisor
having template 18 Ensure that previous day’s Cash Closing Balance while opening
Entrustment of duties: Login as SMS user (USER ID SMS<STAFF No.>); Modify in

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 163 | P a g e
SMM02Authorise in SMM02;Download - 8892 (SMS user profile insert)
 Batch Closure
Sl Activity Entry Verify Submit
Close Teller Batch 9005 Click ok
Close Vault by Vault User 9006
Branch Batch confirm 6005
Batch status 7017
Branch Close ( By Branch-in-charge) 6002
Branch force close (By Branch-in-charge) 6009
CASH Department
Open Reopen Close
Teller Batch 9001 9002 9005
Receipts
Sl Activity Entry Verify Submit
Buy Cash from vault 9007 4500 or 4502
local
Cash Deposit - CASA 1401 4500
Cash Deposit - RD 1421 4500
No submission
Cash Deposit - TD 1402 4500
necessary if
Cash Deposit - DD 8305 4500 authorized
*Serial Number to be noted in the Challan immediately. Only in
Cash Deposit - BAR (Cash Bar) 8416 4500 the case of time gap
Cash Deposit - AGRI LOAN CLOSE 1078 4500 can be done trough
Above option
Cash Deposit - AGRI LOAN INSTALMENT 1072 4500

Cash Deposit - GEN LOAN CLOSE 1067 4500

10 Cash Deposit - GEN LOAN INSTALMENT 1065 4500

11 Cash Deposit - LOAN ADVANCE PAYMT 1068 4500

12 Cash Deposit - MINOR SUBSIDIARY 1460 4500
13 Sell Cash to vault 9008 4500
Cash Transaction Position:7775 TP50497778
14 Old to New Account No Inquiry 7050
The old account No (6 digits ) prefixed by code
FD-07,KD-08,FCNR-11,ODCC- 55,RD-12,
LOANS-66,CA-01,SB-03
CASH Department: Payments
Sl Activity Entry Verify Submit
Buy Cash from vault 9007 4500
Cash Payment - CASA WOF 1001 4500
Cash Payment - CASA CHEQUE 1013 4500
Cash Payment - RD CLOSE CH001 Local
1320 4500
Cash Payment - TD CLOSE 1358 4500 Generally transfered
to GL MAINTENANCE.
FROM THERE CASH
PAYMENT IS MADE.
MOST OF THE TIME
ANY AMOUNT IS
ROUTED THROUGH
ACCOUNT ONLY
Cash Payment - BAR (Cash Bar) 8423 4500 4502 4503
Serial No of Bar to be noted

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 164 | P a g e
 Cash Payment - AGRI LOAN DISBURSE
AL521/1415 4500 4502
Cash Payment - GEN LOAN DISBURSELN521/1413 4500 4502
Cash Payment - DD CBS BRANCH 8310 4500 4502
10 Cash Payment - DD NON CBS BRANCH8323 4503 4502
8310 4500 4502
11 Cash Payment - MINOR SUBSIDIARY 1060 4500 4502
13 Sell Cash to vault 9008 4500 4502
Cash Transaction Position: 7775  TP50497778 CASA
Sl Activity Entry Verify Submit
Customer Search 1000
Customer – ADD NEW 8053 4500 4502
Modify Customer dormant CIM09 CIM09
Modify Account dormant CHM21 CH021
CASA – ACCOUNT OPEN 8051 4500 4502
* Note the Introducer’s id in opening form
CASA - JOINT ACCOUNT AND BENIFITIARY CI142/ CI142/
MAINTENANCE CIM22 CIM22
CASA - OPERATION CONDITION CIM28 CIM28
CASA - LEDGER DISPLAY CH031
Funds Transfer - CASA to CASA 1006 4500 4502
10 Funds Transfer - CASA to MINOR SUBS 1008 4500 4502
11 Funds Transfer - MINOR SUBS to CASA 1408 4500 4502
12 Funds Transfer - MINOR SUBS to MINOR 1005 4500 4502
13 CASA – ACCOUNT CLOSE CH001 CH001
Close out Withdrawal RADIO
BUTTON
1320 4500 4502
14 TOD Limit Master CHM12 CHM12
15 Forced Debit GLM01 GLM01
16 -mail/ Mobile no. to be change then again with CIM 51 CIM51
Ref.no. to be put in 7101 & customer verification
before account opening.
CASA SECTION:
Open Reopen Close
Teller Batch 9001 9002 9005
Cheque Book
Sl Activity Entry Verify Submit
Buy Cheque Book from vault 9019 4500 4502
Modify Cheque Book flag in Master Option 2 CH021 CH021
Issue Cheque Book CHM37 CHM37
* Status to be changed as delivered
Sell Cheque book to vault 9019 4500 4502
Debit Card
Sl Activity Entry Verify Submit
Modify Debit Card flag in Master Option 2 CH021 CH021
Linking the Debit Card CMS01 CMS01
Standing Instruction
Sl Activity Entry Verify Submit
Standing Instruction – CASA/RD CH021 CH021
Standing Instruction –RD/LOAN CHM31 CHM31
Standing Instruction –LOANS LNM31 LNM31
Nomination
Sl Activity Entry Verify Submit

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 165 | P a g e
 Master Maintenance CIM09 RADIO RADIO
Update permanent address BUTTON BUTTON
ADD, MODIFY AUTHORI
ZE
Nominee - Master BA438
Pass Book
Sl Activity Entry Verify Submit
Print Front Page 7030
Print Transaction Entries 7010
Pass Sheet: 7775CH2207778
DEPOSIT SECTION:
Open Reopen Close
Teller Batch 9001 9002 9005
Term Deposits
Sl Activity Entry Verify Submit
Customer Search 1000
TD – ACCOUNT OPEN 8054 4500 4502
TD – Pay in (Opening Transaction) 1356 4500 4502
TD - Pay in from Cash 1402 4500 4502
TD - Pay in from CASA 1007 4500 4502
TD - Pay in from MINOR SUBSIDIARY 1021 4500 4502
TD – JOINT ACCOUNT/BENIFICIARY DETAILS CI142/ CI142/
CIM22 CIM22
TD - OPERATING INSTRUCTION CIM28 CIM28
TD - NOMINATION BA438 BA438
* Nominee’s Id mandatory
10 TD – Interest Pay Out TD039 TD039
11 TD - Interest Payment 1337 4500 4502
12 TD – TDS updating TDS03 TDS03
13 TD – Renewal ( No change in product/Amt) 1316 4500 4502
14 TD - Renewal ( Other circumstances) 1358 4500 4502
Ensure correct Rate of Interest
15 TD - Receipt Buy from Vault 9019 4500 4502
16 TD - Receipt Printing TD046
17 TD - New Account No Inquiry 7050
The old account No (6 digits ) prefixed by code
FD-07,KD-08,FCNR-11,ODCC- 55,RD-12,
LOANS-66,CA-01,SB-03

18. TDS – REFUND TDS 13 LOCAL

AUTHORISATION
Demand draft
Sl Activity Entry Verify Submit
DD - issue against CASH 8305 4500 4502
DD - issue against CASA 1014 4500 4502
DD - issue against MINOR SUBSIDIARY 8306 4500 4502
DD - payment/Cancellation CBS DDs 8310 4500 4502
DD - payment/Cancellation Non CBS DDs 8323 4503 4502
8310 4500 4502
DD - Revalidation 8325 4500 4502
DD - Buy from vault 9019 4500 4502
DD - Printing 5525
Inventory
Sl Activity Entry Verify Submit
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 166 | P a g e
 Inventory Transaction IV001 IV001
Download Inventory Stock details (SMS user) 8892
3. INVENTORY ADJUSTMENT IV002 IV002
REMITTANCES
Open Reopen Close
Teller Batch 9001 9002 9005
NEFT
Sl Activity Entry Verify Submit
NEFT – Batch open 8335
NEFT - Submit for Authorization-Amount to be 8335 8335
entered while Authorizing
IBA Generation
Sl Activity Entry Verify Submit
IBA - Buy from vault 9019 4500 4502
IBA - issue against CASH (Receipt) 8416 4500 4502
IBA - issue against CASA 8418 4500 4502
IBA - issue against MINOR SUBSIDIARY 8417 4500 4502
IBA Responding
Sl Activity Entry Verify Submit
IBA - Responding CBS/Non CBS Branches 8423 4502
2. Respond IBA/ Generate BAR 8419 4500 4503
OSC
Sl Activity Entry Verify Submit
OSC – Lodging 6566 6566
OSC – Despatch Schedule 6806 6806
OSC – Print Despatch Schedule 7775 ST212 7778
OSC – Realisation -Park the IBA in GL 8423 4503 4502
209272380 – Non –CBS 8419 4500 4502
OSC – Realisation - Park the IBA in GL 8419 4500 4502
209272380 - CBS
OSC – Realisation 6806 6806
OSC – Returns 6806 6806
Report 7775 ST657
OSC Delete 6567 6567
ADVANCES SECTION
Open Reopen Close
Teller Batch 9001 9002 9005
Loans
Sl Activity Entry Verify Submit
LOANS – Account Opening LN057 LN057
LOANS - Document Maintenance LN323 LN323
LOANS - MIS Codes AM83 AM83
LOANS - Security Header AM74 AM74
LAONS - Security Link LNM34 LNM34
LOANS - Disbursement LN521 AL521LN521
Agri disbursement AL521
LOANS – AOD updation BA020 BA020
LOANS - Ledger display LNM10
LOANS - Subsequent Disbursement 1413 4500 4502
10 LOANS – Overdue/Libaility 7026

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 167 | P a g e
17 Loans - New Account No Inquiry 7050
The old account No (6 digits ) prefixed by Code
ODCC-55, LOANS-66,
CDB
Sl Activity Entry Verify Submit
CDB – Lodging 6566 6566
CDB – Despatch schedule 6806 6806
CDB – Limit Maintenance CHM47 CHM47
CDB - Cheque Purchase ST070 ST070
CDB- Covering Schedule 7775 ST212 7778
CDB - Realization 6806 6806
keep the proceeds of IBA in GL 209272380
Signature Scanning
Sl Activity Entry Verify Submit
Signature - Link Image 7102 7104
Signature - Unlink Image (wrong linking) 103 7104
Signature - Change in Signature 7111 7104
Important Reports to be generated in CBS
S. NO NAME Option
SB TOD Acs CH621
TRANSACTION IN STAFF ACS ST635
DEPOSIT DUE NOTICE TD604
INTEREST PAID REPORT TD108
INWARD CLEARING ACTIVITIES ST639
OUTWARD CLEARING REPORT ST038
DD Issued summary ST614
DD paid summary ST615
ATM transaction report AT006
10 ATM Failed Transaction AT600
11 Overdrawn OD/OCC accounts CH602
12 List of expired Limits CH607
13 GL Alert Report (after EOD) GL604
14 Cash Transaction Position TP5049
15 Closing Cash position TP5021
16 Daily report GL 616
17 Unauthorised Non financial Transaction report BA001
18 Unauthorised / semi authorised Financial Transaction report BA121
19 Account open Close report ST613
20 Signature captured / Not Captured CH704
21 TOD granted Today CH658
22 Consolidation of Returned Instrument to be generated daily before
11.00 AM in 7775ST6617778
23 Clearing returns due to Financial / Non Finacial Reasons to be generated daily
before Clearing Return 7775ST0347778
SMS Reports
Exemption report SM5003
List of Inactive users SM5004
List of users logged in SM6008
Users logged from same terminal SM6006
SMS Event Log report SM6004
Password changed report SM6005

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 168 | P a g e
 List of logged in users SM6000
Users logged in from other than Home Branch SM6009
List of users created/deleted modified amended SM603
10. Password Due date / Change report SM5005
FLEXCUBE RETAIL
Sl No HOT Keys Description Utility/Remarks

01 Alt+A Combination of Keys To View the Account Details

02 Alt+B Combination of Keys To View Balance Details of the
account (like 7002)
03 Alt+C Combination of Keys To View Customer Name, Address,
relations and customer IC. (Max 3
customers of the account)
04 Alt+S Combination of Keys To View customer Signature &
Operation Instructions.
05 Alt+P At the appropriate screen Printing option (like deposit
receipts, etc)
06 F1 Functional Key Online Help
07 F8 Functional Key To invoke the last used option.
08 F11 Functional Key To change the Size of the Screen.
09 Enter/Tab Key board Key To move to the next field (Pref: Tab
key)
10 Shift+Tab Combination of Keys To move to the Previous field
4500 Remote Authorization 4501 – Centralized Authorization
4502 Incomplete Transaction (Financial) 4503 – Transaction Verification

7775 Report Request 7775 - BA001 - 7778 – Unauthorized

maintenance Report (Non financial
transactions
7778 Advice/Report Status Inquiry 7780 – Advice/Report Cancel
Request
Please NOTE: Options like Balance Enquiry, Customer Enquiry, Signature Enquiry (SL No. 2, 3, 4) can
be viewed from the top tool bar (Related Transactions).

CBS PRODUCT CODE

A. DEPOSITS – CODE / NAME

PRODUCT PRODUCT NAME PRODUCT PRODUCT NAME

CODE CODE
RECURRING DEPOSIT
101 SB GENERAL 181 GENERAL
103 SB NRE 182 RECURRING DEPOSIT STAFF
RECURRING DEPOSIT
104 SB NRO 183 SPECIAL
CANARA BASIC SAVINGS BANK DEPOSIT
108 ACCOUNT-SMC 184 RECURRING DEPOSIT NRE
109 SB CANARA CHAMP 185 RECURRING DEPOSIT NRO
RD CANARA DHANVARSHA
110 SB CANARA JEEVANDHARA FOR SINIOR CITIZEN 186 GENERAL
RD CANARA DHANVARSHA
111 SB STAFF 187 STAFF
CURRENT ACCOUNT
113 SB NRE STAFF 201 GENERAL
114 SB NRO STAFF 203 CURRENT ACCOUNT NRE
115 SB CGA SXTAFF 204 CURRENT ACCOUNT NRO
116 SB CGA GENERAL 205 CURRENT ACCOUNT - DSEL

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 169 | P a g e
 A/C
CAN PREMIUM CURRENT
117 SAVING BANK GOLD SCHEME – N.A. 206 ACCOUNT
118 SUPER SAVINGS SALARY ACCOUNT- N.A. 207 CA - VOSTRO REMIT MONEY
CA - DIAMOND DOLLER
119 SB FINANCIAL INCLUSION WITH SMART CARD 208 ACCOUNT USD
120 CANARA JUNIOR SAVING ACCOUNT CA - ESCROW ACCOUNT - NO
121 SB RFC USD 209 INTEREST
CA - PACKING CREDIT
122 SB RFC GBP 210 SUSPENSE
CA - NATIONAL SPOT
123 SB RFC EUR 212 EXCHANGE
124 SB RFC CAD 214 CANARA PRIVILAGE
CANARA HOME LOAN PLUS
125 SB RFC AUD 220 OD
126 SB FOREIGN DIPLOMATS USD 221 CURRENT ACCOUNT RFC USD
CANARA SMALL SAVINGS BANK DEPOSIT
127 ACCOUNT 222 CURRENT ACCOUNT RFC GBP
CANARA NSIGSE SAVING BANK DEPOSIT
128 ACCOUNT 223 CURRENT ACCOUNT RFC EUR
129 CANARA SB GEN Y SAVINGS BANK ACCOUNT 224 CANARA LAP OVERDRAFT
130 CANARA SB DEFENCE SCHEME 226 KCCS - SISO Account
131 CANARA PAYROLL PACKAGE SCHEME 136 CANARA SB GALAXY
SAVINGS BANK POWER PLUS/ 136 GALAXY
132 ACCOUNT
CURRENT ACCOUNT RFC USD
133 SAVINGS BANK POWER PLUS- NRE 231 DOMESTIC
CURRENT ACCOUNT RFC GBP
134 SAVINGS BANK POWER PLUS- NRO 232 DOMESTIC
CURRENT ACCOUNT RFC EUR
251 OD WORKMEN APPROVED SECURITIES 233 DOMESTIC
CA FOREIGN CURRENCY SEZ
252 OD OFFICERS APPROVED SECURITIES 236 USD
CA FOREIGN CURRENCY SEZ
253 OD CLEAN AWARD STAFF 237 GBP
CA FOREIGN CURRENCY SEZ
254 OD CLEAN OFFICERS 238 EUR
255 LAGHU UDYAMI CREDIT CARD 239 CA EEFC - AUD
CA -EXCHANGE DUE
256 OD GENERAL 240 ACCOUNTS
257 OD AGAINST OUR OWN DEPOSIT 241 CA - EEFC USD
258 OD AGAINST RD / NND 242 CA - EEFC GBP
259 OD AGAINST OUR DEPOSIT (NRE/FCNR/NRO/RFC) 243 CA - EEFC EUR
BANGALORE STOCK
261 OPEN CASH CREDIT GENERAL 244 EXCHANGE CA
CA - COMMODITY EXCHANGE
262 KEY SHIRT CASH CREDIT 245 ACCOUNT
264 ARTISAN CREDIT CARD OD / OCC 246 CA - NCDEX ACCOUNTS
265 SWAROJGAR CREDIT CARD OD / OCC 247 CA - NSEIL ACCOUNTS
OCC - DEALERSHIP OF PUBLIC SECTOR OIL
266 COMPANY 248 CA - OTCEI ACCOUNTS
267 ADVANCES TO NBFC OD/OCC 249 CA - BSE ACCOUNTS
OD SHARE & STOCK
268 CLEAN OD AGRICULTURE 284 BROKERS
269 GOLD 285 OCC CAN TRADE SCHEME
BANGALORE STOCK
271 ALOCC 286 EXCHANGE OD A/C
272 OCC HIGH TECH AGRICULTURE 289 CA -IMPS SETTLEMENT
273 OCC AGRO PRODUCTS 291 CA DIV WARRANT
275 WEAVERS CREDIT CARD SCHEME 291 CA -AFCAO

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 170 | P a g e
 CA - VOSTRO EXCHANGE
278 LOAN COMMISSION AGENT 294 CSS
279 OD FERTILISERS DEALER / SPRINK 295 CA - LPC SALARY CREDIT
CA E PAYMENT OF TAXES
280 OD DOCTORS CHOICE 296 TDS
282 OCC TRADERS SCHEME 297 CA - VOSTRO BANKS
FD C CATEGORY CURRENT
283 OD ARTISANS 298 ACCOUNT
299 CURRENT ACCOUNT LCCR

B. ADVANCES PRODUCT CODE / NAME

PRODUCT PRODUCT NAME PRODUCT PRODUCT NAME

CODE CODE
CANARA BUDGET
601 Now Not Applicable. 668 SUPPLIMENTARY HL WORKMEN
602 CANARA CASH 669 SUPPLIMENTARY HL OFFICERS
HL(STAFF)
603 CANARA VEHICLE 670 RENOVATION/REPAIR/ENLARGEMENT
604 CAN CARRY 681 PMRY
605 CANARA MORTGAGE 682 SGSY
606 CANARA RENT 683 SGSRY
SCHEME OF REHLIB AND REH OF
607 CANARA PENSION 684 SCAVENGER
608 SWARNA LOAN 685 DIR
609 TEACHERS LOAN 691 GOLD LOAN TO STAFF
610 GNANA GANGA 692 DUAL(OLD) STAFF
611 CAN MAHILA 693 DUAL (NEW) STAFF
612 CAN TRAVEL LOAN 694 LHV TWO WHEELERS(OFFICERS)
613 CAN TECH LOAN 695 LHV (OFFICERS) FOUR WHEELERS
614 DOCTORS CHOICE 696 LHV CAR REPAIRS LOAN (OFFICER)
615 CANJEWEL LOAN 697 LHV WORKMEN
616 CANTOOLS 698 LHV MOPED TO SUBSTAFF
LOANS TO BUY SHARES CAR LOAN
617 OFCOMPANY 700 WORKMEN/OFFICERS(COMPOUND)
618 HOME IMPROVEMENT 701 CLEAN DPN LOANS STAFF
619 HOUSING FINANCE 732 SCHEME FOR ENERGY SAVING
620 CANARA SITE 734 ARTISAN CREDIT CARD SCHEME
621 CANARA TRADE 735 SWAROZGAR CREDIT CARD SCHEME
622 CANVALUE LOAN 737 LOAN TO SHG
623 CANSOLAR 739 SOFT LOAN FOR SOLAR WATER
624 CANARA GUIDE 740 LOAN AGAINST HYP OF VEHICLE
625 CANARA JEEVAN 741 DPN
626 CANARA BUDGET LOAN 742 LOAN AGAINST VALUABLE SECURITIES-VSL
HOUSING LOAN NP COMMERCIAL
627 REAL ESTATE 743 VSL AGAINST OUR OWN DEPOSIT
CANARA CONSUMER LOAN
628 744 ADVANCES TO SHAREAND STOCK BROKER
629 CANARA HOME LOAN PLUS 745 CANARA LAP DEMAND NOTE
635 SECURITISATION 746 WORKING CAPITAL TERM LOAN
EDUCATION LOAN VIDYA SAGAR
651 SCHEME 747 FUNDED INTEREST TERM LOAN
652 EL-SAHEED LOAN SCHEME 749 LOANS TO NBFC
653 EL-RBI SCHEME 750 PREMISES LOANS DPN
654 EL-DRI LOAN SCHEME 751 REAL ESTATE LOAN
655 VOCATIONAL EL-MODEL SCHEME 752 PREMISES LOAN -TL
HOUSING LOAN TO
661 AGRICULTURIST 766 LOANS TO MSME*- MFGS INDUSTRIES
662 HOUSING LOAN TO NRI 768 LOANS TO MSME SERVICE

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 171 | P a g e
 SPECIAL RURAL HOUSING
663 SCHEME 769 WEAVER CREDIT CARD TL
664 HOUSING LOAN ACCOUNT 771 CORPORATE LOAN SCHEME
665 HOUSING LOAN INDIRECT 772 LOAN TO SOFTWARE INDUSTRIES
666 HL WORKMAN STAFF 773 TERM LOAN
TERM LOAN EXTENDED TO EXPORTRIENT
667 HL OFFICER STAFF 774 UNIT
775 CANARA LAP-TERM LOAN 835 LOAN FOR FARM HOUSES
781 CROP LOANS 839 AL-KISAN ALL PURPOSE TERM LOAN
KISAN CREDIT CARD SCHEME SHORT
782 PRODUCE LOANS 840 DURATION
LOAN FOR FARM HOUSE
783 MONTHLY 842 AL GOLD LOAN
784 AL- DIR 843 ESTATE PURCHASE LOAN
785 CONS OF COLD STORAGE 844 PRODUCE LOAN
786 AL DPN 845 CROP LOANS
SPECIAL PURPOSE AGRICULUTRE
787 CREDIT 846 SCHEME FOR DEBT SWAPPING OF FARM
788 AL GOLD LOAN 847 CONVERTED CROP LOAN
LOAN FOR RURAL GOWDOWN-
790 MONTHLY 849 AGRI WORKING CAPITAL TERM LOAN
SETTING AGRI CLINIC
791 /BUSINESS MONTHLY 855 PUMPSET /DRIP/SPRINKLER
792 ESTATE PURCHASE LOAN 856 FARM MACHINERY LOAN
793 AL VSL 857 AL LHV
794 AL-DPN -MONTHLY 858 KISAN TATKAL

795 DAIRY LOANS MONTHLY 859 KISAN SUVIDHA-SUB LIMIT II

POULTRY /DUCK REARING -
796 MONTHLY 860 DAIRY LOAN
FISHRIES/MARINE/DEEP-SEA-
797 MONTHLY 861 SHEEP REARING
799 AL LHV-MONTHLY 862 POULTRY/DUCK REARING LOAN

800 GOVT .SPON SCHEME-MONTHLY 863 BULLOCK CART –CAMEL LOAN

801 AGRI –SHG MONTHLY INSTAL 864 PIGGERY LOAN

802 Farm machinery loans 865 APICULTURE
803 AL-LHV 866 SERICULTURE
804 DAIRY LOANS 867 FISHERIES LOAN -INLAND

805 AL GOLD LOAN -MONTHLY 869 FARMER GREEN CARD SCHEME

806 POULTRY LOAN 872 AL DPN
FARMERS BENEFIT SCHEME -
807 MONTHLY 874 BIOGAS PLANT LOAN

808 SPECIAL PURPOSE AGCL -CREDIT 876 KRISHI MITRA CREDIT CARD SCHEME
809 APICULTURE 881 MINOR IRRIGATION

810 FARMERS GREEN CARD-MONTHLY 882 HORTICULUTREPLANTATION

811 DPN-AGRI (OTHER PURPOSE) 883 FARM DEV LOAN

812 JLG OF TENANT FARMERS 884 FARM FORESTRY LOAN

813 FISHERIES LOAN -INLAND 885 CONSTRUCTION OF FARM HOUSES

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 172 | P a g e
 814 FISHRIES LOAN -MARIENE 886 CONSTRUCTION OF COLD STORAGE

815 FISHRIES LOAN DEEP SEA 887 LOAN FOR RURAL GODOWN
LOAN FOR PURCHASE OF AGRICULTURE
816 FARM FORESTORY LOANS 888 LOAN
817 LOAN THROUGH PACS 889 DPN AGRI (PRIO)
PURCHASE OF SHARE IN SUGAR
818 INDUSTRIES 891 AGRI TERM LOAN
SPECIAL COFFEE TL (FOR
819 HASSAN CIRCLE) 893 AGRI GOVT SPONS SCHEME
826 MINOR IRRIGATION 895 KCC SCHEME LONG DURATION

827 HORTICULTURE PLANTATION 897 CANARA KISAN -OD

828 FARM DEVLOPMENT 898 GCC SCHEME REVOLVING
CONSTRUCTION OF COLD
829 STORAGE 899 KRISHI MITRA CARD SCHEME

834 LOAN FOR RURAL GODOWN 900 COLD STORAGE REVOLVING

TEST YOURSELF : CBS BASED QUESTIONS

1. To View Balance Details of the account (like 7002) :
a) Alt +A b) Alt +B c) Alt +C d) Alt +D e) Alt +E
2. KYC DETAILS in CBS menu : a. CIM09 , b. CIM 12 , C. CIM 22 d. CIM 50 e. None
3.Customer additional Informationin CBS : a.CIM09 , b.CIM 12 , C.CIM 50 d.CIM 22 e.None
4.Concession/ Reduction in ROI/SC :a. BAM 72, b. BAM 83, c. BAM88, d.BAM93, e.BAM48
5. Our Bank's Dept. of Information Technology (DIT) is situated at : a. Head Office, J C Road,
Bangalore, b. Head Office, Annexe, Naveen Complex, M G Road, Bangalore
c. Hyderabad CO, d. Mumba , e.None
6. The physical parts/components of a computer are known as
a) Software b) Hardware c) Fixed ware d) None e) All
7. Which of the following numbers are used in the binary number system
a) 0 – 9 b) 0 - 10 c) 1 & 0 d) 2 e) None
8. Which of the following is storage device? : a) Floppy b) CD c) DAT d) All e) None
9. Which of the following component of a computer is known as Brain of computer
a) CPU b) Monitor c) Mouse d) Printer e) None
Which of the following is an output device : a) Printer, b) Mouse, c) Keyboard,
d) All of these e) None
10. Process of starting a computer is known as
a) Booting b) Browsing c) Beeping d) Backup e) None
11. The Passbook can be updated using option a) 7010 b) 7011 c) 7030 d) 7050 e) None
1 2 . To issue Passbook to a customer (for printing Customer details/ cover page) the option used :
a) 7010 b) 7011 c) 7030 d) 7050 e) None of these
1 3 .The Nominee maintenance is done using option :
a) BA437 b) BA438 c) BA436 d) BA001 e) None of these
1 4 .The Customer has given the Voters Card as address proof. It is to be updated in
a)CIM11b) CIM 50 c) CIM 16 d) CIM30 e) None
15. Duplicate Passbook is issued using option :
a) 7010 b) 7011 c) 7030 d) 7050 e) None of these
16. Storage of data from a system to a floppy/CD for future use is called :
a) Backup b) Booting c) Abort d) Closing e) None
17. www is known as –
a) World Wide Web b) World Wis Website c) Bank’s Website d) All e) None
18.A computer that co-ordinates all computer activities into a network is known as
a) Server b) UPS c) Modulator d) LAN e) None
19. A computer programme written with Bad Intention is called
a) Virus b) CD c) DAT d) None e) All
20. OLTAS package is used to –

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 173 | P a g e
a) Remit taxes b) fund transfer c) issue DD d) None e) All
21. Which of the following is also known as plastic money –
a) Debit card b) Cheque c) DD d) Smart Card e) None
22. The computer output that is printed on a paper is called ---
a) Soft copy b) Hard copy c) Electronic copy d) Text Copy e) None
24. While creating a Customer ID of Mr. X, who is staff of Canara Bank, the category selected in Fast
Path 8053 is - a) Individual b) Staff c) Corporate d) Employee e) None of these
25. Customer contact / Inspection details can be recorded using fast path
a) CIM50 b) CIM12 c) CIM26 d) CIM17 e) None of these
26. The threshold limit of the Customer is entered in the Fast path
a) CIM17 b) CIM18 c) CIM22 d) CIM11 e) None of these
27. What is max limit for cash payment at POS
a) 1000 b) 2000 c) 5000 d) 25000 e) None of these
28. The Date of Birth of a Customer can be modified by using Fast Path a) 8051 b) CIM09 c) CIM22 d)
CI142
29. The size of the signature to be linked should not exceed
a) 12KB b) 6 KB c) 16 KB d) 1KB e) None of these
30. Persons residing abroad can send money to their families in India by fastest
mode through : a) Western Union Money Transfer,b) DHL courier, c) STD call,d) Fax,e) None
31. The advantages of Computer are
a) Speed b) Accuracy c) Storage d) All of these e) None of these
32. The Computer can perform which of the following functions
a) Addition b) Subtraction c) Comparisons d) All of these e) None of these
33. CPU stands for : a) Core Packing Unit, b) Core processing Unit
c) Central Processing Unit d) None of the above, e) Computer Processing Unit
34. Which of the following is not a Hardware Component of a Computer?
a) Motherboard b) Monitor c) Printer d) Windows e) Keyboard
35. is also known as the El ectroni c Finger of the Computer
a) Keyboard b) Mouse c) Monitor d) Printer e) None of the above
36. UPS stands for : a) Uninterrupted Power Supply b) Under Power Supply
c) Unix Power Supply d) Unstopped Power System e) None of the above
37. ATM stands for : a) Automated Teller Machine b) Automatic Tailoring Machine
c) Auto Token Machine d) Anywhere Teller Machine e) None of these
38. Letters / File can be sent electronically through cost effective manner
a) Courier b) Tappal c) e-mail d) Speed Post e) None of these
39. The commission for NEFT facility to Customers is : a) Up to 10000 –Rs.2.5 b) Up to 1 lakhs
–Rs.6, c) Above 1 lakhs – Rs.15 d) Above 2 lakhs – Rs.25 e) All the above
40. The concept of sending / receiving text on computer network is called
a) On line database b) e-mail c) teleconferencing d) teleprintinge) fax
41. A word processor can be used : a) To edit document b) To prepare letters, c) Print
documents, d) All of the above e) None of the above
42. A Computer can be used for : a. Anything that a human being cannot do
b. Anything which a human being can do c) Doing calculations only
d) Computing, storing, comparing and retrieving data e) none of these
43. The linking of Computers with telephone Leased Line is done by
a) MODEM b) Pairing, c) Interfacing d) Assembling e) None of the above
44. A Computer generally processes
a) Information b) programme c) Data d) Output e) None of the above
45. The software used by the Computer for booting or starting is called:
a) Input software b) Virus, c) Application Software, d) Operating Software e) None
46. Priority / non- Priority Classification in CBS :
a. BAM 83, b.BAM 72,c. BAM88, d.BAM93, e.BAM48
47. The Signature of a Customer can be captured by
a) Keyboard b) Scanner c) Mouse d) none of the above e) all of the above
48. The process of protecting data from unauthorized Users is called
a) Data Security, b) Data Encryption, c) Data Validity,d) All of the above e) None of the above
49.The relation of Minor in a self-operated Account is : a) Sole owner b) Guardian c) Joint and first
d) Joint and other e) None of these
50.There are three customers in an account. The third person’s name
can be deleted using option :
a) CI142 b) CIM09 c) CH021 d) CIM28 e) None of these
51. The Block Development Officer's account has Additional Instruction stating that cheques up to
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 174 | P a g e
Rs5000/- is to be signed by Officer and above Rs.5000/- by BDO himself. This can be captured using
optiona) 8051 b) CIM09 c) CH021 d) CIM28 e) None of these
52. The Risk Category of the Customer can be captured using Fast Path :
a) CIM11 b) CIM17 c) CIM 22 d) CIM 50 e) None of these
53. The PAN details of the Customer is to be captured in Fast Path :
a) 8053 b) 8051 c) CIM50 d) CIM09 e) None of these
54. n CBS, Addition of New Customer is done by using Fast Path :
a) 8051 b) 8053 c) CIM22 d) CI142 e) None of these
55. After scanning, the signature can be linked using Fast path
a) 7102 b) 7103 c) 7104 d) 7111 e) None of these
56.The Teller has linked a signature. However, before authorization he finds out that he has linked a
wrong signature. He can unlink the signature using Fast path
a) 7102 b) 7103 c) 7104 d) 7111 e) Non e of th ese
57.The relation of Minor in a Guardian operated account is
a) Sole owner b) Guardian c) Joint and other d) Joint or other e) None of these
58.Software used for writing letter/text is
a) MS Word b) Editing c) Updating d) Calculating e) None of the above
59. MS Windows is : a) Hexagonal System b) Operating System c) Trinary System
d) None of the above e) All the above
60. Which of the following attributes cannot be attributed to computers?
a) High Speedb) Accuracy c) Versatility d) Emotions e) None of the above
61. Different types of picture appear on desktop in WINDOWS environment is known as
a) Iconb. Picture c. Object d) None of these e. All of these
62.Different computers in the same building can be interlinked by using
a. LAN b WAN c) MAN d) All of them e) None of them
63.Buy now & Pay later is the facility available under
a. Debit card b. ATM card c. Credit card d. All of these e. None of the above
64.User id and is required to enter into a package
a) Key b) Staff No. c) Password d) All the above e) None of the above
65. Following is an input device
a) Keyboard b) Mouse c) Scanner d) All the above e) None of the above
66. Data Centre for CBS is located in
a. Mangalore b. Bangalore c. Mumbai d. Hyderabad e. New Delhi
67.Maximum amount that can be drawn through ATM per day is Rs.
a. 10000 b. 40000 c. 20000 d. 18000 e. 50000
68. The Website of our Bank is : a. www.canbank.com b. www.canarabank.com
c. www.canarabank.org d. www.canbankindia.in e. None of the above
69. Minimum amount for sending through RTGS is Rs. -a. Rs 1 lakh 2) Rs 2 Lakh and above c)
Rs 5 lakhs, d) Rs 10 lakhs e) No ceiling
70.. How many transactions are free for usage of our Bank’s SB account debit card in other bank ATM
- a) 5 b) No Charges c) 10 d) 15 e) No limit
71. ATM Cash loading to be done by whom? -a) Any two employees one not below the rank of
officers b) Armed Guard, c) Currency Chest d) None e) All the above
72.In CBS, Cash withdrawal in other than home branch can be by way of ?
a) Cheque only b) Withdrawal order form only c) Not paid
d) No restriction e) none of the above
73. Wh eth er du plicate pass book for SB account h older s can be issu ed in CBS? a) To
be i ssu ed manually b) It can be issu ed in CBS c) No du plicate pass book
d) All th e above e) Non e
74. The Toll Free No 1800 425 0018 connects a) CBS help desk b) Customer toll free number
c) Complaints phone d) Government of India e) None
75. Compulsory leave in a year to be lodged in -a) HRMS package b) To be manually maintained
c) Maintained in CBS d) Any of the above e) None of the above
76. What is max limit for cash payment at POS?
a) 1000 b) 2000 c) 5000 d) 25000 e) None
77. ETDS refers to what -a) Electronic TDS b) English TDS c) Company name
d) All of these e) None of these
78. ATM complaints if any to be resolved in how many days?
a) 7 days b) No limit c) No complaint to be accepted d) 30 days e) None
7 9 . R T G S m e a n s - a) Real Time Gross Settlement b) Company name
c) Police authority d) Wing at HOe) None
80. Suspended account in CBS system refers to -a) Loan Accounts b) Staff a/c c) Customer
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 175 | P a g e
account d) NPA account e) None
81. Mobile banking refers to a) Opening Mobile phone Company Account,b) Call manager by
mobile c) Doing Bank transaction using mobile phone,d) All the above e) None of the above
82. FCC refers to a) Flex cube company b) Flex cube corporate c) All Company Accounts d)
All of these e) None
83. NB164 used in our Branches is used for a) BAR register b) User Profile Maintenance Register
c) Computer Note Book d) All the above e) None
84. Customer Terminal in a branch is meant for
a) Customers b) Currency Chest c) Circle Office d) Head Office e) None
85. When connectivity fails in CBS branches , We need to do the following - a) Call TM Sec / NAP
Centre b) Keep idle c) No action required d) All the above e) None
86. LOR / AOD obtained to be updated in ......a) F CR b) FCC c) HR MS d) EMAIL
e) Man u all y mai ntain ed i n a regi ster
87. List of computers in a branch available in .........
a) NB164 b) NB9 c) Cash book d) Inventory Book e) Nearby branch
88. Mandatory reports in CBS means -a) Compulsory reports to print and preserve b) Stock
Room c) CBS computer d) Key board e) Slip Bundle
89. Validity of Personalized & Non Personalized card
a) 10 Years b) 10 & 3 Years c) No Validity d) 5 Years e) None
90. RuPay Debit card ( Which is Incorrect) :-a) Domestic b) Global
c) Valid for 10 years d) Can be linked to 4 accounts e) None
91. Platinum Debit Card – Cash withdrawal limit from ATM :
a) 25000 b) 20000 c) 50000 d) 40000e) None
9 2 . A S B A m e a n s - a.Application supported by Blocked account,b.Application supported by
Blocked amount, c.Application supported by Blocked Demat account
d. Application supported by Blocked Arrangement ,e.None of the above
93. IMP S m ean s- a . Interbank Mobile Payment Service, b. Immediate Payment Services
c. Both are correct, d.Either a or b is correct e. None of the above
94. Facilities under Internet banking – a. Update Aadhar No, b.Hotlisting of Debit Card
c. loan Repayments, d. Funds transfer ,e. All the above
95.CTS means - a) Cheque Truncation System b) CT Scan, c) Cheque Truncation Software
d) Cheque Transaction Service e) None of the above
96.The Customer level Memo Maintenance can be done using Fast path
a) CIM18 b) CIM22 c) CIM13 d) CIM12 e) None of these
9 7 . The Customer has given Driving License as Address proof, the details can be entered using fast
path a) CIM50 b) CIM11 c) CIM26 d) CIM17 e) None of these
98.The name of the Customer is Subhash Chandra Bose, so in Fast path 8053, the Short name
should be a) Subhash b) Subhash Chandra Bose c) C h a n d r u d ) B o s e e ) N o n e o f t h e s e
99.The first four characters of Customer IC consists of a) First four character of branch name
b) Date of birth & month, c) First four character of the first name, d) DP Code of the branch
e) None of these
100.The linking of ATM/Debit Card to the SB/CA/ODCC account is
done by using option a) CH001 b) CMS01 c) CIM09 d) CMS10 e)
None of these
101.To update details of customers in CIM09 we use which mode (Radio button) –
a) Add b) Modify c) Amend d) Cancel e) None of these
102. In CBS the Introducers details is captured in option :
a) 8051 b) 8053 c) 8054 d) CIM22 e) None of these
103. For closure of the SB/CA/ODCC account the option used is
a) CH002 b) CH001 c) CH003 d) CHM01 e) None of these
104.The Teller B can make Cash Payments without authorization up to - a) Rs10000/- b)
Rs50000/- c) Rs20000/ d) Rs100000/- e) None of these
105.The Teller can Buy cash from vault using option :-
a) 9006 b) 9008 c) 9007 d) 9003 e) None of these
106. For tallying of slips the Tellers before closing their batch opt for the report-
a) TP6002 b) TP005 c) TP6210 d) TP2410 e) None of these
107.The Statement Inquiry for a SB/CA/ODCC Account can be done using option :
a) CH001 b) CHM31 c) CH031 d) CH021 e) None of these
108. Mr. Henry was the only Customer in an account. After getting married, he wants to add the
name of his wife with operation condition jointly. The relation of Mr. Henry with the account will be a)
Sole owner, b) Joint and first , c) Joint and other, d) Joint or first e) none of these
109. The relation of third customer with the Account with operation condition Severally is
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 176 | P a g e
a) Sole owner b) Joint and other c) Joint or other d) Joint or first e) None of these
110. In CHM37, the cheque leaf with status S represents –
a) Stagnant b) Stopped c) Salary d) Standard e) None of these
111.The Teller B has passing power under Transfer Transactions up to
a) 10000/- b) Rs25000/- c) Rs100000/- d) Rs50000/- e) None of these
112.The Teller A can make Cash Payments without authorization up to
a) Rs10000/- b) Rs50000/- c) Rs20000/ d) Rs100000/- e) None of these
113. Cash Balancing can be done using option
a) TP6201 b) 9008 c) 9007 d) 9003 e) None of these
114.To issue a Pass sheet to a Customer in SB/CA/ODCC account we
use 7775 followed by-
a) CH220 b) CH440 c) CH110 d) CH180 e) None of these
115. All the accounts of a customer can be viewed using option –
a) 1000 b) CIM09 c) 8053 d) 8051 e) None of these
116. The minor account status in Guardian operated account is
a) Major, b) Minor with restriction c) Minor without restrictions d) Any of these e) None .
117. The fourth Customer in CBS environment can be added using option –
a) CIM28 b) CIM09 c) CH021 d) CI142 e) None of these
118The relation of the Trustee to the Account will be -
a) Sole ownerb) Authorized signatory c) Trustee d) Guardian e) None of these
119.In CBS, the system identifies a Customer as Minor based on - a) Customer IC in 8053 b) Date
of birth in 8053, c) Category in 8053 d) PAN card e) None of these.
120.The Customer wants to withdraw Cash from account using Withdrawal Order Form. The option to
be used is a) 1001 b) 1013 c) 1006 d) 1401 e) None of these
121. To view the Signature of the Customer, the User can use Hot keys
a) ALT + A b) ALT + B c) ALT +S d) ALT+ C e) None of these
122. After Signature is linked, Supervisor can authorize the same using Fast path
a) 7102 b) 7103 c) 7104 d) 7111 e) None of these
123. Fast path Option for Vault Teller Batch closure is
a) 6002 b)6009 c) 6001 d) 9006 e) None of these
124. The KYC details are captured using fast path option
a) 8053 b) 8051 c) CIM50 d) CIM09 e) None of these
1 2 5 .Under Report / Print option 7775 /7778, Closing Cash position of Branch is Generated using
report option
a) TP6007 b)TP5049 c) TP5021 d) TP603 e) None of these
126.Fast path option to view the Signature of a Customer by selecting ID / IC is
a) 7102 b) 7103 c) 7104 d) 7105 e) None of these
126. In CBS, CASA Accounts are opened by using Fast Path-
a) CI142 b) 8053 c) CIM22 d) 8051 e) None of these
127. MODEM stands for -a) Modulator / Demodulator b) Modulation Demand
c) Modular demand d) Modular kitchen item e) none of these
128. Vault Teller Batch is opened using Fast path Option
a) 6002 b)9003 c) 6001 d) 9001 e) None of these
129. CANNET is an example of –
a) Internet b) Intranet c) Both d) Internal software e) None of these
130.In Statement Inquiry, the “ Prior” Radio button pertains to - a) Current month
b) Previous calendar month, c) Any range of 30 days d) Last month of the calendar year
e) none of these.
1 3 1 . The funds transfer from one CASA account to another CASA account can be done Using Fast
path -a) 1001 b) 1005 c) 1006 d) 1401 e) None of these
132. Full Passport details of a Customer can be captured in Fast path-
a) CIM11 b) CIM22 c) CIM18 d) CIM09 e) None of these
134. The conversion of Joint account into Single account can be done using option
a) C IM16 b) C I1 42 c ) C H 021 d) C H M4 8 e ) N on e o f t h e s e
135. The maximum number of Accounts that can be linked in Card Maintenance (CMS01)
a) One b) Two c) Three d) Four e) None of these
136. The Customer Dormancy status can be changed by fast path
a) CIM13 b) CIM16 c) CIM18 d) CIM22 e) None of these
137. Ration card detail of a Customer can be captured in Fast Path
a) CIM11 b) CIM50 c) CIM18 d) CIM09 e) None of these
138. In option 8053, we validate after giving IC and Category, a. to find out if it is an existing
customer, b to find out if an existing account holder, c both (a) and (b) d) to find out customer of
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 177 | P a g e
 other Bank e)None of these.
139. The status of a particular leaf is displayed as (D). It indicates
a) Delivered b) Destroyed c) Distorted d) Dropped e) None of these
140. While linking Personalized Cards in CMS01, we have to select –
a) Starter Kit b) Debit Card c) Both (a) and (b) d) Final kit e) None of these.
141. In a 13 digit CBS account number, the 5th to 7th digits starting from left represent
a) DP Code of the branch b) Product Code c) Serial Number d) Category,e)None of these
142. How many Customer Ids are required for opening a Company Current Account with Three
authorized signatories -a) One b) Two c) Three d) four e) None of these
143. The Customer Short name can be changed. The effect takes place -a) Immediately b) Not
possible, c) End of the day d) same day beginning of day e) None of these
144. The two types of Native reports in Flexcube retail are a) Adhoc and Regular
b) Adhoc and Batch c) Regular and Batch, d) Adhoc and Single e) None of these
145. Batch Report refers to a) Previous day EOD b) Today BOD c) As of now d) None
146. Hold funds can be done using option
a) 1065 b) 1055 c) 1000 d) 1001 e) No n e of th e se
147.The Savings Bank account is transferred from one CBS branch to another CBS branch, The
account number a) Does not change b) changes c) cannot transfer account in CBS d) New
branch DP Code is added e) none of these
148. The CBS Savings Bank Account number consists of how many digits
a) 10 b) 1 2 c) 1 3 d ) 16 e ) N on e of th e s e
149. To view Native Reports in Flexcube Retail, we use option a) 7778 b) 7775 c) 7780 d) 7776 e)
None of these
150. How many Customer IDs are required to open a Proprietorship firm Current Account.
a) One b) Two c) Three d) four e) None of these
151. Linking of CASA account to DBT Scheme : a. CHM63 b. CHM 31, c.CHM37,d.CHM35, e. None
152.Rescheduling of Loans with Capitalization : a. LN521, b. LN524 ,c. LNM10, d. LNM525, e. None
153. Restructuring of loans with/without capitalization :
a. LN521, b. LN524 ,c. LNM10, d. LNM525, e. None
154. To modify 3MIS fields of classification of loans ( Priority / Non-priority ) :
a. BAM83, b. BAM93, c. BAM 72, d, BAM86, e. BAM 48
155. CHOICE Insurance premium payment (New/Renewal) : a. 7071, b. 7002, c. CH021, d. 1401
156. New business/Renewal Premium acknowledgement print a. 7071, b. 7002, c. BA001,
d.BA033
157. View history of all changes done in LNM38/ALM38 : a. LNM10,b.LN521,c.LNM40, d. LN 522
158. Remitting of TD Interest payout through NEFT: a. 8339, TD03, c. TDS03, d. 8340 , e. None
159. ODLimit enquiry –History of limit done through CHM07 : a. CHM17, b.CHM 31,c. CHM35, d.CHM48
160. Deletion of OSC/FOSC booked in 6566 a. 6566, b. 6567, c ST567, d. ST 657, e. none
ANSWER
1 2 3 4 5 6 7 8 9 10
b d d e b b c d a a
11 12 13 14 15 16 17 18 19 20
a a c b b c a a a a
21 22 23 24 25 26 27 28 29 30
a a b b b e a b c a
31 32 33 34 35 36 37 38 39 40
d d c d b a a c e b
41 42 43 44 45 46 47 48 49 50
d d a c d a b d a a
51 52 53 54 55 56 57 58 59 60
d d c b a b a a d d
61 62 63 64 65 66 67 68 69 70
a a c c d b b b b a
71 72 73 74 75 76 77 78 79 80
a a b b a a a a a d
81 82 83 84 85 86 87 88 89 90
c b b a a a d a a b
91 92 93 94 95 96 97 98 99 100

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 178 | P a g e
 c b b e a c a b d b
101 102 103 104 105 106 107 108 109 110
b b b c c a c b b b
111 112 113 114 115 116 117 118 119 120
b a e a a c d c b a
121 122 123 124 125 126 127 128 129 130
c c d c c d d a b b
131 132 133 134 135 136 137 138 139 140

b c b b d b b a b a
141 142 143 144 145 146 147 148 149 150
b d c b a b a c a b
151 152 153 154 155 156 157 158 159 160
a b d b a d c a a b

10.NPA & RECOVERY MGMT

The prudent guidelines were first issued by RBI in the year 1991 implemented wef 01.04.1992 on
recommendations of Narasimham committee covering, income recognition, asset classification and
provisioning. Prudential norms prescribed by RBI include norms relating to Accounting, Exposure,
and Capital Adequacy. Prudential accounting norms are income recognition, asset classification and
provisioning.
CLASSIFICATION AS NPA
If Interest and/ or instalment of principal remain overdue for aperiod of more
Term Loan
than 90 days
CC/ if the account remains 'out of order or the limit is not renewed/reviewed
Credit/overdraft within180 days from the due date of renewal. Out of order means an account
where (i) the balance is continuously more than the sanctioned limit or
drawing power OR (ii) where as on the date of Balance Sheet, there is no
credit in the account continuously for 90 days or credit is less than interest
debited OR (iii) where stock statement not received for 3 months or more. if
the bill remains overdue for a period of more than 90 days from due date .
Bills

Agricultural (I) if loan has been granted for short duration crop: interest and/or instalment
accounts of principal remains overdue for two crop seasons beyond the due date.
(ii) if loan has been granted for long duration crop: interest and/or instalment
of principal remains overdue for one crop season beyond due date.
3. Decision about crop duration to be taken by SLBC.

Loan against FD, Advances against term deposits, NSCs eligible for surrender, IVPs, KVPs and
NSC, KVP, LIP life policies not treated as NPAs provided sufficient margin is available.
Advances against gold

ornaments, govt securities and all other securities are not covered by this
exemption
Loan guaranteed Loan guaranteed by Central Govt not treated as NPA for asset classification
by Government and provisioning till the Government repudiates its guarantee when invoked.
Treated as NPA for income recognition.
Advances guaranteed by the State Government classified as NPA as in other
cases
Consortium Asset classification of accounts under consortium should be based on the
advances record of recovery of the individual member banks.

· DISTRESSED ASSETS:
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 179 | P a g e
  Identify incipient stress by creating a sub-category viz., Special mention accounts (SMA)
before a loan Account turns into an NPA.
 Early formation of lender’s committee with timeline to agree a plan of resolution.
 Incentives for lenders to agree collectively and quickly to plan.
 Improvement in current restructuring process.
 More expensive future borrowing for borrowers who do not co-operate with lenders.
 More liberal regulatory treatment of asset sales.
SPECIAL MENTION ACCOUNTS:
SMA SUB CATEGORY BASIS FOR CLASSIFICATION

SMA 0 Principal or interest payment not overdue for more than 30 days but
account showing signs of incipient stress.

SMA 1 Principal or interest payment overdue between 31 – 60 days.

SMA 2 Principal or interest payment overdue between 61 – 90 days.
SMA-0: IDENTIFIED AREAS
 Delay of 90 days or more in
 Submission of stock statement/ other statements such as QOS, HOS and ABS.
 Credit monitoring or financial statements or
 Non renewal of facilities based on audited financials.
 Actual sales/operating profits falling short of projections accepted by 40% or more.
 A single event of non co-operation /prevention from conduct of stock audits.
 Reduction of Drawing Power (DP) by 20% or more after a stock audit.
 Evidence of diversion of funds for unapproved purpose.
 Drop in internal risk rating by 2 or more notches in a single review.
 Return of 3 or more cheques (or electronic debit instructions ) issued by borrowers in 30
days, on grounds of non availability of balance / DP.
 Return of 3 or more bills/cheques discounted or sent under collection.
 Devolvement of Deferred Payment Guarantee (DPG) installments or LCs or invocation of
BGs and its non payment within 30 days.
 Third request for extension of time either for creation or perfection of securities or for
compliance with any other terms and conditions of sanction.
 Increase in frequency of overdrafts in current accounts.
 The borrower reporting stress in the business and financials.
Promoter(s) pledging/ selling their shares in the borrower Company due to financial stress.
Asset Classification :Assets can be categorized into four categories namely (i) Standard (ii) Sub
Standard (iii) Doubtful (iv)Loss
The last three categories are classified as NPAs based on the period for which the asset has
remained nonperforming and the realisability of the dues.
(i) Standard Assets: The loan accounts which are regular and do not carry more than normal risk.
Within Standard assets, there could be accounts which though have not become NPA but are
irregular. Such accounts are called as Special Mention accounts.
(ii) Sub-standard Assets: With effect from 31.3.2005, a sub-standard asset is one, which is
classified as NPA for a period not exceeding 12 Months.
(iii) Doubtful Assets: With effect from 31 March 2005, an asset is to be classified as doubtful, if it
has remained NPA or sub standard for a period exceeding 12 months.
Doubtful accounts are further classified in three categories namely Doubtful 1 (D1), .Doubtful 2 (D2)
and Doubtful 3 (D3).
Doubtful 1 or D1: It is that account which is doubtful up to one year.
Doubtful 2 or D2: It is that account which is doubtful for more than one year but up to 3 year.
Doubtful 3 or D3: It is that account which is doubtful for more than 3 year.
Thus an account remains D1 for 12 months and D2 for 24 months.
(iv) Loss Assets: A loss asset is one where loss has been identified by the bank or internal or
external auditors or the RBI inspection but the amount has not been written off wholly. In other
words, such an asset is considered uncollectible and of such little value that its continuance as a
bankable asset is not warranted although there may be some salvage or recovery value.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 180 | P a g e
 When an account is classified as Doubtful or Loss without waiting for 12 months: If the realizable
value of tangible security in an account which was secured in the beginning falls below 10% of the
outstanding, it should be classified loss asset without waiting for 12 months and if the realizable
value of security is 10% or above but below 50% of the outstanding, it should be classified as
doubtful irrespective of the period for which it has remained NPA.
What is to be done when account becomes NPA?
1. If one account of the borrower in the bank becomes NPA in one branch, then all accounts of
that borrower in other branches of the same bank also are classified as NPA. Thus classification
as NPA is done borrowerwise and not accountwise. Only exception to this rule is loan granted to
Primary Agricultural Credit Societies.
2. In NPA account, interest or any other charge can be debited to the account only when it is
recovered.
3. In all NPA accounts, provision is to be made on the basis of asset classification.
Income recognition — Policy: Income from non-performing assets (NPA) to be booked as income only
when it is actually received. The bank should reverse the interest already charged during previous
periods and not collected by debiting Profit and Loss account

PROVISIONING NORMS: Provisioning is made on all types of assets i.e. Standard, Sub
standard, Doubtful and loss assets.
1. Standard 'Assets: Banks should make general provision for standard assets at the following
rates for the funded outstanding on global loan portfolio basis:
(a) Direct advances to agricultural and SME sectors: 0.25 per cent of outstanding
(b) Advances to Commercial Real Estate (CRE) Sector: 1.00 per cent of outstanding; ( CRE for
Residential Housing — 0.75% of outstanding)
(c) Housing Loans at teaser rates till these continue at teaser rates; 2.00 per cent of outstanding.
(d) All other loans and advances not included above: 0.40 per cent of outstanding.
Some points to be noted are:
(1) The provisioning is as percentage of outstanding. It has nothing to do with the availability of
security.
(2) The concessional rate of provisioning of 0.25% is available only in respect of direct advance to
agriculture and micro and small enterprises. It is not available for indirect advances.
(3) The provisions on standard assets should not be reckoned for arriving at net NPAs. The
provisions towards Standard Assets need not be netted from gross advances but shown separately
as 'Contingent Provisions against Standard Assets' under 'Other Liabilities and Provisions Others' in
Schedule 5 of the balance sheet.

2. Sub Standard Assets:

(1) Sub standard secured accounts (secured from beginning): 15% of the outstanding balance.
(2) Sub standard unsecured accounts: 25% of outstanding balance (infrastructure loan accounts:
20%)
(3) Unsecured exposure is defined as an exposure where the realisable value of the security, as
assessed by the bank/approved valuers/Reserve Bank's inspecting officers, is -not more than 10
percent, ab-initio, of the outstanding exposure.
(4) For sub standard assets, the provision is as percentage of outstanding balance. It is not
calculated separately for secured or unsecured portion.
3. Doubtful Assets:
In case of doubtful assets, while making provisions, realizable value of security is to be considered.
100% provision is made for unsecured portion. In case of secured portion, rate of provision varies
from 25% to 100% depending on the period for which the account has been doubtful. The rate of
provision on secured portion of doubtful asset based on age of the doubtful asset is given below:

Age of Doubtful Asset Provision as % of secured portion

Doubtful up to 1 year; D1 25% of RVS

Doubtful for more than 1 year to 3 years; 02 40% of RVS

Doubtful for more than 3 years; D3 100% of RVS

Therefore, provisioning on Doubtful assets will be as given below:

D1 account: 100% for the unsecured portion plus 25% of the realizable value of security.
D2 account: 100% for the unsecured portion plus 40% of the realizable value of security
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 181 | P a g e
 D3 account: 100% for the unsecured portion plus 100% of the realizable value of security
Thus, if an account is doubtful for more than 3 years, then 100% of the provision is to be made both
for secured and unsecured portion.
If an advance has been guaranteed by DICGC/CGFTIECGC and is doubtful, then provision on secured
portion will be as in other cases but provision on unsecured portion will be made after deducting the
claim available. For example, if the outstanding amount in a 02 account is Rs 10 lac, security is Rs 6
lac, and DICGC cover is 50%, then on Rs 6 lac, the provision will be at the rate of 40% and of the
unsecured portion of Rs 4 lac, provision will be made at the rate of 100% on Rs 2 lac.
4. Loss Assets: 100% of the outstanding amount.
5. Restructured Advances when upgraded to standard category: 5% for first two years.

6. Suspense Interest: While making provisions on NPAs, amount lying in Suspense interest account
and derecognized interest should be deducted from gross advance and provisions be made on the
balance amount.
7. Overall provisions: Total provisioning coverage ratio, should be minimum 70%. Banks should
achieve this norm not later than end-September 2010. Provisioning coverage ratio is the ratio of
provisioning to gross NPAs.
8. Floating Provisions: Banks can deduct floating provisions from gross NPAs or *reckon it as part
of Tier II capital subject to the overall ceiling of 1.25% of total Risk Weighted Assets.
Gross and Net Advances.and Gross and Net NPA:
(i) Gross Advance = Standard Assets + Gross NPA. (For the purpose of computing Gross Advances,
interest recorded in the Memorandum account should not be taken into account.
(ii) Net NPA = Gross NPA minus provisioning for NPAs
(iii) Net advances = Gross advances minus provisioning for NPAs
(iv) Net NPA ratio = Net NPA/Net advances*100

Other features:
1. Asset classification of accounts under consortium should be based on the record of recovery of
the individual member banks.
2. Advances a ainst term de osits NSCs eli•ible for surrender IVPs KVPs and life policies need not
be treated as NPAs provided sufficient margin is available. Advances against gold ornaments,
government securities and all other securities are not covered by this exemption.
3. Government guaranteed advances: The credit facilities backed by guarantee of the Central
Government will be treated as NPA for income recognition. However, asset classification and
provisioning would be made only when the Government repudiates its guarantee when invoked.
4. Availability of security or net worth of borrower/guarantor should not be taken into account for
the purpose of treating an advance as NPA. It should be on the basis of record of recovery.
Provisioning Coverage Ratio & CCPB in terms of Circular dated Dec 01, 2009, a Provisioning
Coverage Ratio (PCR) of 70% of gross NPAs was prescribed by RBI, as a macro-prudential
measure, to augmenting provisioning buffer in a counter-cyclical manner when the banks were
making good profits. Banks have been advised (Apr 21, 2011) by RBI that :
the PCR of 70% may be with reference to the gross NPA position in banks as on September 30,
2010;
ii. the surplus of the provision under PCR vis-a-vis as required, should be segregated into an
account styled as countercyclical provisioning buffer (CCPB)
iii. This buffer will be allowed to be used by banks for making specific provisions for NPAs during
periods of system wide downturn, with the prior approval of RBI. (On March 31, 2015, RBI allowed
banks to use 50% of CCPB as on Dec 31, 2014).
Further, PCR is to be disdosed in Notes to Accounts to the Balance Sheet
Appropriation of recovery
Banks should adopt an accounting principle and exercise the right of appropriation of recoveries
(towards principal and interest) in a uniform and consistent manner.
Rehabilitation cases
As regards the advances granted under rehabilitation packages finalised by BIFR and/or term lending
institutions, banks should not make any provision on the additional facility for a period of one year from
date of disbursement. However, for original advance, provision be made according to the classification
viz. substandard or doubtful, as the ease may be.
Security/means of the borrower/guarantors
a) Availability of security or net worth of borrower/guarantor should not be taken into account for the
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 purpose of treating an advance as NPA or otherwise, as income recognition is based on record of
recovery.
b) The net means of the borrowers and guarantors are not to be included as security for the purpose
of calculating shortfall in doubtful category.
c) Pari-passu / second charge on all block assets should be treated as security.
d) Surplus security available in one loan be considered in another loan of the same borrower where
there is a shortfall.

Treatment of NPA Provisions

RBI as per circular of Mar 24, 2009 has decided as under, in regard to the prudential treatment of
different types of provisions in respect of loans portfolios. RBI has clarified that the relative
provisions can only be reckoned for the purpose listed there against.
(i) Additional Provisions for NPAs at higher than prescribed rates:
The regulatory norms for provisioning represent the minimum requirement. Therefore, banks may
voluntarily make specific provisions for NPAs at rates which are higher than the rates prescribed
under existing regulations if such higher rates are based on a policy approved by the Board of
Directors to provide for estimated actual loss in collectible amount and the policy is consistently
adopted from year to year. The additional provisions for NPAs, like the minimum regulatory
provision on NPAs, may be netted off from gross NPAs to arrive at the net NPAs
(ii) Excess Provisions on sale of Standard Asset/NPAs :
(a) If sale consideration is higher than the book value in respect of Standard Asset, the excess
provisions may be credited to Profit & Loss Account.
(b) Excess provisions which arise on sale of NPAs can be admitted as Tier II capital subject to the
overall ceiling of 1.25% of total Risk Weighted Assets.
Provision for Diminution in the Fair Value of Restructured Advances
Computation of erosion of fair value : It is computed as the difference between the fair value
before and after restructuring.
Fair value before restructuring is computed as the present value of cash flows of interest (at the
existing rate on the loan before restructuring) and the principal, discounted at a rate equal to the
bank's base rate (applicable to borrower) as on the date of restructuring plus appropriate term
premium and credit risk premium for the borrower category on the date of restructuring. Fair value of
the loan after restructuring :
RBI, decided (02.07.15) that a rate equal to the actual interest rate charged to the borrower before
restructuring may be used to discount the future cash flows for the purpose of determining the
diminution in fair value of loans on restructuring. If existing credit facilities carry different rates of
interest, the weighted average interest rate (with share of each credit facility in the total outstanding
of the borrower as on the date of restructuring being used as weights) may be used as the
discounting rate. This rate may be used to discount pre-restructuring cash flows & post-restructuring
cash flows.
This methodology is to be consistently used wherever banks are required to compute fair/present
value of loans under RBI guidelines, including for the purpose of computing net present value of
project loans.
WILFUL LOAN DEFAULTERS - REVISED RBI GUIDELINES
RBI implemented the recommendations of (Kohli Working Group) wef May 31, 2002.
What is Wilful Default ?
A wilful default would be deemed to have occurred if any of the following events is noted :The unit
has defaulted in meeting its payment / repayment obligations to the lender :
(i) even when it has the capacity to honour the obligations OR
(ii) and has not utilised the finance from the lender for the purposes for which finance was availed
of but has diverted funds for other purposes OR
(iii) and has siphoned off the funds so that the funds have not been utilised for specific purpose for
which finance was availed of, nor are funds available with unit in the form of other assets OR and has
disposed of or removed the movable fixed assets or immovable property given by it for the purpose of securing a term loan
without RBI clarifications
The term 'unit' means individuals, juristic persons and all other forms of business enterprises.
A guarantor who fails to repay bank loan on being called to pay when borrower defaults, will also be
categorized willful defaulter, if he has capacity to pay. Within a group, if a group company has given
corporate guarantee for other company declared willful defaulter, the guarantor company will also be
considered willful defaulter, if it does not repay the loan, as guarantor.
(iv) Cut-off limits for Penal provisions Any wilful defaulter with an outstanding balance of Rs.
25 lakh or more, would attract the penal measures. This limit of Rs. 25 lakh may also be applied

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 for the purpose of taking cognizance of the instances of 'siphoning' / 'diversion' of funds.
(v) Penal measures
(vi) a: In order to prevent the access to the capital markets by the wilful defaulters, a copy of the
list of wilful defaulters would henceforth be forwarded by RBI to SEBI as well.
b. No additional facilities should be granted by any bank / FI to the listed wilful defaulters. In
addition, the entrepreneurs / promoters of companies not to be allowed any financial support for
floating new ventures for a period of 5 years from the date the name of the wilful defaulter is
published in the list of wilful defaulters by the RBI.
c. The legal process, wherever warranted, against the borrowers / guarantors and foreclosure of
recovery of dues should be initiated expeditiously. The lenders may initiate criminal proceedings
against wilful defaulters.
(vii) Reporting of Willful Defaulters
(viii) I. Banks are to furnish data on willful defaulters (non-suit filed accounts) for Dec 31, 2014 onwards to
Credit Information companies and not to RBI. Thereafter, banks/FIs may continue to furnish data on a monthly
or a more frequent basis, so that information is available on a near real time basis.
(ix) if) Data on willful defaulters (suit filed accounts) of Rs.25 lac and above will continued to be submitted to
CICs.
Grievance Redressal Mechanism: Decisions to classify the borrower as wilful defaulter is
entrusted to a Committee headed by the Executive Director and consisting of • two GMs/DGMs.
Another committee headed by Chairman/CMD/CEO is to review the decision taken by the above
committee.
NON-COOPERATIVE BORROWERS (RBI Dec 22, 2014)
A non-cooperative borrower is one who does not engage constructively with his lender by .(i) defaulting in
timely repayment of dues while having ability to pay, (ii) thwarting lenders' efforts for recovery of their dues
by not providing necessary information sought, (iii) denying access to assets financed / collateral securities,
(iv) obstructing sale of securities, etc.
(x) The cut off limit for classifying as non-cooperative would be aggregate fund-based and non-fund bas4d
facilities of Rs.50 million from the concerned bank/FI.
(xi) The decision to classify as non-cooperative borrower is entrusted to a Committee headed by an Executive
Director and consisting of two other officers (General Managers/ Deputy General Managers) as decided by
the Board of the concerned bank/r1.
(xii)The Committee shall issue a Show Cause Notice to the borrower (promoter/whole-time directors in case
of companies) and call for his submission and after considering his submission issue an order recording the
borrower to be non-cooperative and reasons for same.
d) The order of this Committee should be reviewed by another Committee headed by the Chairman / CEO
and MD and consisting two independent directors. The order to be come final when confirmed by Review
Committee.
e) Banks/Fls will report information on their non-cooperative borrowers to CRILC under CRILC-Main
(Quarterly Submission) return within 21 days from the close of the relevant quarter.
f) Boards of banks/Fls should review on a half-yearly basis the status of non-cooperative borrowers for
deciding whether their names can be declassified as evidenced by their return to credit discipline and
cooperative dealings. Removal of names from the list of non-cooperative borrowers should be separately
reported under CRILC with adequate reasoning/rationale for such removal.
g} Banks/Fis will make higher provisioning as applicable to substandard assets for new loans sanctioned
to such borrowers as also new loans sanctioned to any other company that has on its board of directors
any of the whole time directors/promoters of a non-cooperative borrowing company or any firm in which
such a non-cooperative borrower is in charge of management of the affairs. However, for the purpose of
asset classification and income recognition, the new loans would be treated as standard assets.
Central Registry of Securitisation Assets Reconstruction & Security Interest of India
Govt. of India established the Central Registry of Securitisation Asset Reconstruction and Security
Interest of India (CERSAI), a Govt. Company, U/S 25 of Companies Act, 1956 on Mar 31, 2011. It
operates/maintains Central Registry functions as per SARFAESI Act 2002 under the
superintendence and
direction of Central Registrar.The majority
shareholding (51%) is with Central Govt., Public Sector Banks and National Housing Bank.
Type of transactions - It registers transactions relating to security interest over property and
transactions of securitization and asset reconstruction. With registration of these transactions, a
public data base is created about encumbrances created on properties to secure loans and advances
given by banks/FIs, as also transactions of securitization or asset reconstruction undertaken under

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 provisions of the SARFAESI Act. The following transactions are not covered : (1) Securitization or
asset reconstruction done outside the provisions of the SARFAESI Act ; or (2) Security interest
created in favour of any lender not included in the definition,of bank or, FI as per SARFAESI Act.
Who is covered : The secured creditors notified under the SARFAESI Act. are to file the details
Roll over of Short-Term Loans: A roll-over of a short term loan, will be considered as
'restructuring'. If such accounts (other than properly assessed regular Working Capital Loans like
revolving Cash Credit or Working Capital Demand Loans), are rolled-over more than 2 times, then on
3rd roll-over onwards, the account would be treated as a restructured account.
Conversion of Debt : The conversion into preference shares should be done only as a last resort maximum up
to 10% of the restructured debt. The conversion should be done only in the case of listed companies subject to
statutory requirement u/s 19 of the BR Act 1949 and relevant SEBI regulations.
Right of Recompense: All restructuring packages must incorporate 'Right to recompense' dause and it should
be based on certain performance criteria of the borrower. In any case minimum 75% of the recompense
amount should be recovered by the lenders and in cases where some facility under restructuring has been
extended below base rate, 100% of the recompense amount should be recovered.
Repeatedly restructured accounts
The concession is not available if the account is restructured for the second or more times.

Benchmarks for Viability Parameters (RBI — May 31, 2013)

As per extant instruction account can be taken up for restructuring by the banks if the financial viability is
established and there is a reasonable certainty of repayment from the borrower. RBI decided that the
viability should be determined based on the acceptable viability parameters and benchmarks for each
parameter as under:
i. Return on capital employed should be at least equivalent to 5 year Govt. security yield plus 2%.
ii. The debt service coverage ratio (DSCR) should be greater than 1.25 within the 5 years period in which the
unit should become viable. On year to year basis the ratio should be above 1. The normal DSCR for 10 years
repayment, should be around 1.33.
iii. The benchmark gap between. internal rate of return & cost of capital, should be minimum 1%.
iv. Operating and cash break even points should be worked out and they should be comparable with the
industry norms.
v. Trends of the company in relation to EBIDTA, based on historical data and future projections should be
comparable with the industry average.

Strategic Debt Restructuring (SDR) Scheme RBI authorised banks {08.06.15) to undertake an
SDR i.e. converting loan dues to equity shares, with the following features:
i) JLF to incorporate, in the terms and conditions, an option to convert the loan (including unpaid
interest) into shares in the company. if the borrower fails to achieve the viability milestones
and/or adhere to the 'critical conditions', the JLF may decide on whether to invoke the SDR to acquire
majority shareholding in the company, which should be min 51% (compliance with Sec19(2) of Banking
Regulation Act, 1949 to be ensured).
ii) The decision should be taken within 30 days and approved by majority of the JLF members (min 75% by
value and 60% by number);
iii) Conversion package should be approved within 90 days from date of deciding to undertake SDR;
iv) The conversion should be completed within 90 days from the date of approval. SDR invocation
will not be treated as restructuring for asset classification and provisioning norms;
v) On completion of conversion, the existing asset classification, as on the reference date, will continue
for a period of 18 months. Thereafter, the classification will be as per IRAC norms.
viii. On divestment in favour of a 'new promoter', account will upgraded to 'Standard'. The provision
shall be reversed when the loans perform satisfactorily during the 'specified period'.
On divestment, banks may refinance the existing debt considering the changed risk profile without
treating the exercise as 'restructuring'.
v). The asset classification benefit is subject to the following conditions:
a. The 'new promoter' should not be an associate from the existing promoter/promoter group; and
b. The new promoters acquired at least 51% of the paid up equity capital of the company. If
foreign investment ceiling is less than 51%, new
non-resident promoter should own min 26% of the paid up equity capital or up to applicable foreign
investment limit, whichever is higher and banks should be satisfied that the non-resident promoter controls
the management.
Calculation of conversion price of the equity Conversion should at fair value decided by JLF on a
reference date, not exceed lowest of the following:
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a) Market value i.e. average closing prices during 10 trading days preceding the 'reference date';
b) Break-up value i.e. book value per share calculated from latest audited balance sheet
(without considering 'revaluation reserves') not more than a year old. In case absence of the latest
balance sheet the break-up value shall be Re.1. Banks should adhere to all the prescribed conditions
by SEBI in this regard.
Regulatory Ceiling : Acquisition of shares will be exempted from regulatory restrictions. Acquisition will
require reporting to PBS, RBI, CO every month)
Equity shares under SDR shall be assigned a 150% risk weight for 18 months from the
'reference date'. After 18 months these shares shall be assigned risk weights as per the extant
regulations.
Marking to market : Equity shares shall be exempt from periodic mark-to-market for 18 month
period.
Central Repository of Information on Large Credit (CRILC)
U/s 27 (2) B R Act, RBI decided to use the information in Form-A (Return on Large borrowers of
Rs.10 cr and above) for Central repository. W.e.f. 1.4.14, RBI created CRILC (Central Repository
of Information on Large Credit).
Banks are required to send on quarterly basis (within 21 days) the information relating to
(i) Fund and non-fund based loan account of Rs.5 cr and above (with PAN details). Loans extended
by overseas branches are also to be reported. (Exempted loans : Crop loans and inter-bank
exposures including to NI-113, DIM, SIDBI, NABARD).
(ii) current account balance (debit or credit) of Rs.1 cr and above
(iii) SMA accounts with exposure of R s.5 cr and above and all SMA-2. (banks can report
on weekly basis as on every Friday).
Framework for Revitalising NPAs RBI' framework became effective from Apr 1, 2014. Early
Recognition : Banks have 3 sub-categories under special mention accounts (SMA) category: SMA-0 :
Principal or interest payment overdue upto 30 days but account showing signs of incipient stress.
SMA-1 : Principal or interest payment overdue between 31-60 days.
SMA-2 : Principal or interest payment overdue between 61-90 days.
Stress Signs to classify as SMA
1. Delay of 90 days or more in stock statement / other financial statements, renewal of loan limits.
2. Actual sales /operating profits, falling short by 40% compared with projected sales OR reduction
of DP by 20% due to stock audit OR drop in credit rating by 2 or more notches.
3. Return of 3 or more cheques for insufficiency of funds or returns of 3 or more cheques sent for
collection.
4. Non-payment of devolved LC or DPG payment for 30 days or more.
d
5. 3' request for time extension for compliance of conditions.
Mandatory formation of Joint Lenders' Forum: When an account is reported to CRILC as SMA-2,
the banks, are to form a Joint Lenders' Forum (JLF) and formulate a joint Corrective Action Plan
(CAP).
 In existing consortium accounts leader bank will be convener and consortium will serve as ..11.F.
 For Multiple Banking Arrangements accounts, bank with the highest exposure will convene JLF.
 JLF formation is mandatory for all distressed borrowers with total fund and non-fund based
exposure (AE) of Rs.1000 million and above. For other SMA accounts also, lenders can form JLFs.
 If a borrower requests, for formation of a JLF, the account should be reported to CRILC as SMA-0.
Options for Corrective Action Plan (CAP) by ILF
(a) Rectification : Obtaining a commitment from the borrower with identifiable cash flows within the
required time to regularise the account without additional finance or involving any loss or sacrifice.
(b) Restructuring : if prima facie viable and the borrower is not a willful defaulter.
(c) Recovery : If above is not feasible, due recovery process may be resorted to, by the JLF with
consent of minimum of 75% of creditors by value and 60% by number, which will be binding on the
lenders.
Time limits : 1) JLF is to decide on the option to be adopted within 30 days from (i) the date of
reporting as SMA-2 by any lender, or (ii) receipt of request from the borrower to form a JLF.
2) JLF should sign off final CAP within next 30 days.
Restructuring Process by JLF
Case can be referred to CDR Cell or JLF can restructure independent of CDR structure.
i) Restructuring package by JLF
1) JLF to carry out a Techno-Economic Viability study. If viable, the package to be finalized within 45
days.
2) For accounts up to Rs.5000 million, package to be approved and conveyed by banks to the
borrower, within the next 15 days, for implementation.
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For accounts with AE above Rs.5000 million, the TEV study and restructuring package to be evaluated
by an Independent Evaluation Committee (TEC) for recommendation within 45 days. If agreed by JLF,
the package is to be approved by all the lenders and communicated to the borrower within next 15
days. General conditions : 1) Asset Classification benefit available as under CDR, will be available to
such accounts also. The Classification as on the date of formation of JLF will be taken into account.
2) The viability should be determined based on acceptable viability benchmarks (such as Debt Equity
Ratio, Debt Service Coverage Ratio, Liquidity/Current Ratio, amount of provision in lieu of the
diminution in the fair value of the restructured advance, etc).
3) The operational details, on CDR mechanism, including One Time Settlement, will be applicable. ii)
Restructuring package under CDR
1) As the preliminary viability of account has been decided by JLF, CDR Cell need not duplicate this
process and directly prepare the TEV study and restructuring plan within 30 days.
2) For accounts with exposure of less than Rs.5000 million, the package should be submitted to CDR
Empowered Group (EG) for approval for final decision within the next 30 days. Approved package
should be approved by all lenders and conveyed to the borrower within next 30 days.
3) For accounts with exposure of Rs.5000 million and above, the TEV study and restructuring
package prepared by CDR Cell to be evaluated by an Independent Evaluation Committee (IEC) of
experts which will give recommendation within 30 days. If JLF decides to go ahead with the
restructuring, it should be communicated to CDR Cell. Thereafter, CDR EG should decide within the
next 30 days. CDR approved package should be approved by all lenders and conveyed to borrower
within the next 30 days.
Other Conditions Relating to Restructuring
1) Shareholders bear first loss rather than the banks.
2) In case of listed companies, lenders may be ab-initio compensated for their loss/sacrifice by issue
of equities of the company upfront. If acquisition results in exceeding the regulatory Capital Market
Exposure limit, it will not be treated a breach. It will be reported to RBI and disclosed in the Balance
Sheet.
Prudential Norms on Asset Classification and Provisioning : For proposal under consideration,
the usual classification norm would continue. As an incentive for implementation, the asset
classification status as on the date of formation of JLF, would be the relevant date to decide the asset
classification status after implementation of restructuring package (this incentive will be withdrawn
w.e.f. April 1, 2015).
Penal Measures for non-adherence : If lenders fail to report SMA status to CRILC or resort to
conceal the actual status or evergreen, they will accelerate provisioning at provisioning rates
mentioned above.
Backtracking : If a bank that agreed to the restructuring, backtracks it has to accelerate
provisioning as above. If the account is standard in those lenders' books, the provisioning
requirement will be 5%.
Failure to convene 3LF : If lenders fail to convene JLF or fail to agree upon a common CAP within the
stipulated time frame, the account will require accelerated provisioning as above.
If any of the banks reported the account as SMA2 to CRILC and 3LF convening bank fails to convene
JLF, the convening bank will be required to make accelerated provisions.
In case of consortium accounts, if lead bank fails to convene JLF within 15 days of reporting account
as SMA2, the next largest shareholder bank will assume the responsibility of lead bank.
If the escrow maintaining bank under JLF/CDR does not appropriate proceeds of repayment as per
agreed terms, the account with the escrow maintaining bank will attract the asset classification and
provisioning for one year, which is lowest among the lending member banks.
Willful Defaulters, Accountability of Promoters / Directors / Auditors
(a) The provisioning for existing loans to companies having director/s (other than nominee directors
of govt./financial institutions), whose names appear more than once in the fist of wilful defaulters,
will be 5% in cases of standard accounts and accelerated provisioning as above, if NPA.
(b) To discourage borrowers/defaulters from being unreasonable and non-cooperative, banks may
classify such borrowers as non-cooperative borrowers, after giving 30 days notice. Banks will make
higher/accelerated provisioning for new loans to such borrowers or company promoted by such
promoters or to a company on whose board any of promoter / directors of this non-cooperative
borrower is a director.
(c) RBI will create a database of directors on the boards of companies classified as non-cooperative
borrowers for dissemination to lenders.
Sale and Purchase of NPAs by banks
1. The sale and purchase of NPAs can be made by banks, financial institutions and NBFCs

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2. A bank can sell NPA provided it is held in its books as NPA for any period.
3. The sale will be on cash basis and without recourse basis. Purchasing bank can not resell the
same to the selling bank.
4. The asset will be classified as Standard Asset in the books of the purchasing bank for 90 days
and thereafter on the basis of its record of recovery.
5. Purchasing bank can resell the same other than to the original bank after keeping the same in its
books for 12 months
6. The purchasing bank should realize the assets within 3 years. Minimum 10% should be
recovered in the first year and 5% in the each following half year.
7 . In the books of the purchasing bank, this asset will carry a risk weight of 100% for capital
adequacy purpose. Asset Reconstruction Companies
1. ARCs have been set up for taking over NPAs from banks/Fls and reconstruct or re pack these
for sale
2. First ARC is Asset Reconstruction Company of India Ltd (ARCIL)
3. ARC will be set up as a joint stock company. Registration with RBI is must before commencement
of business as ARC.
4. ARC should start business within 6 months of registration with RBI. RBI can extend it by another
six months.
5. Net owned funds of ARC should be 15% of the acquired assets or Rs 100 crore whichever is
less.
6. Capital Adequacy Ratio at all times should be at least 15%
7. ARC should invest at least 15% in security receipts created out of each securitization.
Reporting to Credit Information Company:
(v) Both in respect of suit filed and non suit filed accounts, banks/Fis should furnish the data in
respect of wilful defaulters of Rs. 25 lakhs and above for the quarter ending December 31, 2014 and
the data on defaulters (other than willful) of Rs. 1 crore and above for the half year ending
December 31, 2014 to Credit Information Company and not to RI31. Thereafter, banks/Fls may
continue to furnish data in respect of defaulters/wilful defaulters to CICs on a monthly or a more
frequent basis.
SUMMARY OF PROVISIONS PERCENTAGE
Standard - General accounts – 0.40 %
Direct Agriculture & SME – 0.25 %
Commercial Real Estate – 1.00%
Teaser Home Loans (provision will be 0.4% after one year of increase in interest rate)
2.00%
New restructured a/c w.e.f 01.06.2013 : 5%
Existing a/c Restructured upto 31.03.2013
wef 31.03.14 ( spread over four quarters ) : 3.5%
wef 31.03.15 ( spread over four quarters ) : 4.25%
wef 31.03.16 ( spread over four quarters ) : 5.0%
Sub-standard Secured 15%
Sub-standard Unsecured 25%
Sub-standard unsecured (infrastructure accounts) 20%
Doubtful - up to 12 months 25%
Doubtful - more than 12 months but up to 3 years 40%
Doubtful - more than 3 years (secured/unsecured): 100%
Loss account 100%
Provisioning coverage ratio is to be calculated w.r.t. gross NPAs as on Sept 2010 (ratio 70%
of provisions / gross NPAs). Excess amount (over and above account-wise provision) to
be kept in Cyclical Provision Buffer Account -70%
Important issues relating to provisions : Provision on Standard account to be kept as part of
other Liabilities in Schedule-5 of bank's balance sheet (it will be part of tier 2 capital fund for CAR
purpose) Provision on Standard accounts to be done on Global Balance and for NPA accounts on Gross
Balance For Doubtful accounts provision to be done Separately for secured portion and unsecured
portion of total balance in the account.For sub-standard accounts, provision to be done by treating
the account secured sub-standard or unsecured sub-standard without bifurcating the balance into
secured or unsecured.
Sub-standard unsecured account means an account where at the time of sanction no security
obtained or security value was 10% or less
Gross NPAs: It is the principal dues of NPAs plus Funded Interest Term Loan where the
corresponding contra credit is parked in sundry account (Interest Capitalization – Restructured

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 188 | P a g e
 Accounts), in respect of NPAs
NET NPAs: Net NPAs is the amount of Gross NPAs minus
Provisions held in the case of NPA Accounts as per asset classification (including additional
provisions for NPAs at higher than prescribed rates)
 DICGC/ ECGC claims received and held pending adjustment
 Part payment received and kept in Suspense A/c or any other similar accounts
 Balance in Sundry Accounts (Interest Capitalization – Restructured Accounts), in respect of NPAs
 Floating provisions : Provisions in lieu of diminution in the fair value of restructured accounts classified as
NPAs
 Provisions in lieu of diminution in the fair value of restructured accounts classified as standard assets

UPGRADATION OF LOAN ACCOUNTS CLASSIFIED AS NPAs

1. if arrears of interest and principal are paid by the borrower in the case of loan accounts classified as NPAs,
the account may be classified as 'standard' accounts immediately.
2. Restructured accounts: After one year after the date when first payment of interest or of principal,
whichever is earlier, falls due, subject to satisfactory performance during 12 months period from the date of
starting payment after moratorium period. For example, an account was restructured on 5th Jan 2014,
moratorium period 6 months, 1st instalment due on 5th July 2014 which was paid on 1s4 July 2014 and
thereafter account was regular for 12 months. This account will be upgraded on 5th July 2015 and not on 1st
July 2015.
ASSET RECONSTRUCTION COMPANIES
An Asset Reconstruction Company (ARC) is a company incorporated under Companies Act 1956 to
engages itself in the activity of financial asset reconstruction (such as securitisation, takeover of
management, sale of assets charged). Financial asset: The term financial asset means, the loans,
advances and investments, made by the banks and financial institutions.
RBI registration : To undertake such activity, it is mandatory that the company gets itself registered
with RBI under the provisions of SARFAESI Act. The company should also commence its business
within 6 months, of such registration (Oct 2006).
Owned Funds : Wef Mar 29, 2004, for commencement of business, the net worth should not less than
15% of assets acquired or Rs.100 lac whichever is less.
They should maintain capital adequacy ratio of minimum 15% of total risk weighted assets.
Functions of ARCs : ARCs acquire nonperforming loans (also called distressed assets) from banks
and Pis at a discount and take steps to recover these loans by way of securitisation, reconstruction
or sale of the assets. In certain cases, they resort to management take over also.
Realisation plan and due diligence: Before bidding, SCs/RCs may conduct a proper due diligence
within minimum 2 weeks.
The realization period can be max 5 years from date of acquisition (period can be extended to 8 years by
Board April 2010). In case of BIFR/CDR/iLF cases, the period can be co-terminus with other lenders. (RBI
07.05.15)
[SC/RC will have planning period of max six months to formulate a plan for realization of NPA of the
selling bank acquired for the purpose of reconstruction].
Sale and purchase of NPAs between ARCs: As per RBI clarification (April 2009), it is not allowed.
Parking of bad loan after purchase: For the purpose of take over of the loan, the ARC creates a Trust
called Special Purpose Vehicle and ARC acts as Trustee' and managing agent for ultimate realization of
the financial asset.
Financing of purchase of loans : SPV holds the financial asset on strength of the security available. It
issues security receipts (SRs) to the investors, mainly the qualified institutional buyers (QIBs). The
investors get the cash on realization of the financial assets when the security receipts are redeemed.
Security receipt : SR represents undivided right / interest in favour of the investors in the financial
assets held by SPV. The SRs are redeemed out of realization from financial assets and do not carry
fixed returns. These are only pass through certificates and not debt instruments. SRs can also be sold
in the secondary market. Presently the SRs are unlisted and there is no trading.
Valuation of SRs -The initial valuation should be done within a period of six months of acquiring the
underlying asset to enable all the stake holders to realistically assess the value of SRs at an earlier
date. It is mandatory for SC/RCs to invest in and continue to hold a minimum 15% stake of the
outstanding amount of the security receipts issued by them under each scheme and each class tilt the
redemption of all the security receipts, under a particular scheme.
FDI /FIT investment
i. Combined limit of 74%. No sponsor may hold more than 50% of the shareholding in an ARC either
by way of FDI or by routing through an FII.
ii. The total shareholding of an individual Fil shall not exceed 10% of the total paid-up capital.
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Hi. FII investment in SRs - 74% of the paid up value of each tranche of scheme of Security Receipts
(without individual limit of 10% for investment of a single Fit in each tranche of SRs issued)
Asset Classification
(1) Assets shall be classified as Standard and nonperforming assets. The NPAs to be classified further
as:
(a) 'Sub-standard asset' for a period not exceeding 12 months from date it was classified as NPA;
(b) 'Doubtful asset' if the asset remains a substandard asset for a period exceeding 12 months;
(c) 'Loss asset' if the asset is non-performing for a period exceeding 5 years or 8 years or if the asset
is adversely affected by a potential threat of non-recoverability due to either erosion in the value of
security or non-availability of security or if it has been . identified as loss asset by the Company or
its internal or external auditor.
Provisioning requirements Substandard Assets: 10% of the outstanding; Doubtful Assets (i) 100%
provision for the asset not covered by the estimated realisable value of security; (ii) In addition 50%
of the remaining outstanding. Loss Assets: The entire asset shall be written off. (If, for any reason,
the asset is retained in the books, 100% thereof shall be provided for).
Investment: Surplus can be deployed with NABARD and SIDBI. An upper limit of 10% of the owned
funds has been stipulated for the investment in land and buildings for their own use.
Membership in Joint Lenders' Forum (JLF) SCs/RCs should be members of JLF and should be a
part of the process involving the JLF with reference to such stressed assets.

Relief Measures for Natural Calamities

To enable banks to take uniform action expeditiously, RBI issued guidelines (Mar 25, 2015) covering 4
aspects viz. Institutional Framework, Restructuring of Existing Loans, Providing Fresh Loans and Other
Ancillary Relief Measures.
1. Institutional Framework
 The declaration of natural calamities is to be done by Central/State Govt., when crop loss is 50%
or more (called Annewari, Paisewari, Girdawari).
 The bank branches should have a set of standing instructions for action to be initiated in the calamity
affected areas after the declaration.
 Divisional/ Zonal Managers of commercial banks should be vested with discretionary powers for the
line of action agreed to by the District/ State Level Bankers' Committees covering adoption of scales of
finance, extension of loan periods, sanction of new loans.
 The meeting will be convened by (i) the convener of the SLBC if the calamity covered the entire State/
larger part of a State (ii) the conveners of the District Consultative Committees if the calamity has
affected only a small part of the State/few districts.
 In case of very severe calamity, relief measures may be reviewed on weekly/fortnightly basis.
2. Restructuring/Rescheduling of Existing Loans
a) Short-term Crop Loans_: Other than overdue, all short-term loans can be restructured. The due amount
in the year of occurrence may be converted into term loan with repayment period of 3 to 5 years (for very
severe damage up to 7 years and in extreme cases up to 10 years). The moratorium period should be of
min one year. The banks should not insist for additional collateral security for such restructured loans.
b) Long term (Investment) agriculture Credit
i) Natural Calamities where only crop for that year is damaged and productive assets are not damaged:
The banks may reschedule the payment of installment and extend the loan period by one year in non-
willful default cases and postpone payment of interest.
ii) Natural Calamities where the productive assets are partially or totally damaged and borrowers are in
need of a new loan: The rescheduling by way of extension of loan period may be done and the total
repayment period for the restructured/fresh term loan should not exceed 10 years.
Asset Classification
a) The restructured portion may be treated as current dues and need not be classified as NPA.
b) Banks are required to make higher provisions for such restructured standard advances as prescribed by
RBI.
b) The classification of the remaining amount due (riot restructured), will continue to be as per
original terms. The dues may be classified under different categories viz. standard, sub-standard,
doubtful and toss.d
c) Additional loan may be treated as "standard asset".
 The benefit of asset classification of the restructured accounts is available only if the restructuring is
completed within 3 months.
 The accounts restructured for the second time or more on account of natural calamities, would retain the
same asset classification category on restructuring.
3. Sanctioning of Fresh Loans
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 After decision on the rescheduling of loans is taken by SLBC/DCC, banks may grant fresh crop loans
to the affected farmers and other affected borrowers.
 Consumption loans can be allowed up to Rs. 10,000 to existing borrowers without any collateral
(banks can enhance the limit beyond Rs. 10,000).
Providing access to Bank Accounts: Where the bank branches are affected, banks may operate from
temporary premises. For continuing the temporary premises beyond 30 days, specific approval may be
obtained from RBI.
Wilful Defaulters
1. Wilful defaulters of Rs 25 lac & above to be reported to RBI
2. Reporting to RBI will be quarterly
3. Where suits have been filed, banks should submit the list of suit-filed accounts of wilful defaulters of Rs.25
lakh and above as at end-March, June, September and December every year to Credit Information
agency like CIBIL and not to RBI.
LOK ADALAT : Created under Legal Services Authority, Act 1983.Decisions are consent decrees. There is no
appeal against such decree. Civil Procedure Code is applicable. These Adalats are similar to civil courts.Banks
can call Lok Adalat with application to High-court.Amount: General Lok Adalat: Up to Rs 20 lacs (wef Aug 03,
2004) and above Rs 20 lacs DRT Lok Adalat.Eligible accounts: NPA (Loss and doubtful accounts).After full
payment discharge should be given.Repayment: Preferably down payment. Max in 1-3 years.
Central Registry of Securitization Assets Reconstruction and Security Interest of India (CERSAI) : Central
Registry of Securitization Assets Reconstruction and Security Interest of India (CERSAI) established as a Sec
25 Company to perform functions of Central Registry wef 31.03.2011.Objective: To prevent loan frauds
relating to multiple mortgage of same property.Transaction of securitization and reconstruction of financial
assets and equitable mortgages to be registered.Time period for registration is 30 days, which can be
increased by 30 days by Central Registrar.Form I to IV for different transactions.

SARFAESI ACT 2002 ( SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS &

ENFORCEMENT OFSECURITY INTEREST ACT 2002 ) : Applicable wef Aug 23, 2002 in entire India,
including J & K .Amendment: Act amended during 2004 on Supreme Court intervention in Mardia Chemicals vs
Union of India and others (provisions of deposit of 75% amount by borrower before approaching DRT were
withdrawn). Banks can take possession of the charged securities, take management of securities, can sell the
charged securities, without court intervention. Designated officer to initiate action under the Act: Scale IV and
above in banks OR officers approved by BoD of the bank. Consortium/BIFR cases: In case of joint/consortium
financing consent of 75% (by value) creditors required for action. BIFR cases can be recalled back with consent
of 75% of creditors.Possession: 60 days notice before possession. Remedy to borrower: If borrower objects,
bank to justify the possession within one week/ 15 days. If borrower not satisfied could approach DRT within 45
days (without depositing any amount). DRT's decision is appealable (within 30 days) to DRAT after deposit of
50% of amount that could be reduced to 25% by DRAT.Sale: Before sale 30 days notice. Sale below reserve
price (to be fixed by bank) only with consent of the borrower. Sale can be by tenders or though public auction.
For sale through auction, public notice in 2 news papers (one. regional). Sale is confirmed on receipt of 25%
amount immediately and balance is payable in 15 days. DRT pending case: Banks can make use of SARFAESI
Act for sale of security for such cases (Supreme Court - Transcore vs Union of India & others).
loans not eligible under SARFAESI Act : Loans with outstanding up to Rs.1 lac. Agriculture land cannot be Sold;
Where the amount due is less than 20% of the principal and interest (i.e. 80% or more already recovered).
Loans secured by pledge, lien & by security of bank deposits.Where limitation has expired Where security is not
charged to the Bank.
Summary of Time Limits in SARFAESI Act
Notice before possession 60 days
Reply to objection by borrower 15 days
Borrower can approach DRT against possession notice without deposit of any amount 45 days

Appeal to DRAT against decision of DRT by deposit of 50% amount which can be reduced 30 days
to 25% by DRAT
Notice before sale 30 days
Period of balance payment 75% by the buyer of assets 15 days

Important Section in SARFAESI Act

60 days notice before possession Sec 13 (2)
Assistance by Chief Metropolitan Magistrate or Dist. Sec 14 Magistrate in taking Sec 14
possession
Application to DRT against possession notice issued by the bank Sec 17

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 Appeal against DRT to DRAT by depositing 50% amount Sec 18

Debt Recovery Tribunal : Created under Recovery of Debt Due to Banks & FIs Act 1993 (except J&K).
These are like other civil courts for a special purpose of helping in quicker NPA recovery in large account. DRT
headed by President (President assisted by Registrar and Recovery Officer) and DRAT by Chairperson. Eligible
account: Loans of banks and FIs with recoverable dues of Rs.10 lac or more. Jurisdiction: No other court has
jurisdiction over such cases.Time limit: On receipt of application, show cause notice to borrower to submit his
defence within 30 days. Disposal is expected in 180 days. Disposal of appeal by DRAT also maximum 180
days.Appeal: Order by DRT appealable to DRAT within 45 days from date of receipt after deposit of 75% of
due amount. DRAT may reduce or waive the amount.Order: After claim is upheld, Recovery certificate is
issued. Recovery officer has powers such as attachment etc. under Income Tax Act.Appeal to President of
DRT against order of Recovery Officer within 30 days and appeal against Registrar within 15 days. Fee:
Rs.12000. For each additional Rs.1 lac Rs.1000. Max 1.50 lacs. For appeal Rs.12000 for debt less than Rs.10
lac, 20000 (10 lac to less than Rs.30 lac) and Rs.30000 (Rs.30 lac & above).
Asset Reconstruction Companies : Objective: For taking over distressed assets from banks/FIs at
discount and reconstruct or re-pack for sale. Recovery period maximum of 5 years (8 years with Board
Approval).To be set up as a joint stock company. RBI registration must before commencement for business
as ARC.Business to be commenced within 6 months of registration with RBI. RBI can extend it by another 1
year in aggregate.Net worth: not less Rs.100 cr or 15% of acquired assets, whichever lower. Capital
adequacy ratio min 15% of Risk Weighted Assets.ARC to invest at least 5% in security receipts created out of
each securitization.
Corporate Debt Restructuring (CDR):
1. The borrower should be a corporate borrower i.e. Companies, Co-operative societies etc.
2. The loan should have been raised from more than one bank or financial institution. The scheme
will not apply to accounts involving only one financial institution or one bank
3. The outstanding fund based and non-fund based exposure should be Rs.10 crore and above by
banks and institutions.
4. The CDR Mechanism is available to the corporates engaged in industrial as well as non-industrial
activities. The account should be standard, sub standard or Doubtful.
5. The account should be Standard, Sub Standarad or Doubtful. Loss accounts are not covered.
6. There would be no requirement of the account / company being sick, NPA or being in default for a
specified period before reference to the CDR system.
7. Corporates indulging in frauds and malfeasance even in a single bank will be ineligible for
restructuring under CDR mechanism.
8. The accounts where recovery suits have been filed by the creditors against the company, may be
eligible for consideration under the CDR system provided, the initiative to resolve the case under
the CDR system is taken by at least 75% of the creditors (by value) and 60% of creditors (by
number).
Types of CDR: CDR is of two types namely CDR I & CDR II. CDR I is applicable to Standard and Sub
Standard accounts if at least 90% of creditors by value have treated the account as standard/sub
standard. It means that if in the books of creditors with exposure up to 10% by value, the account is
classified as Doubtful, it can be still covered under CDR 1. CDR Ii is applicable to Doubtful accounts.
Category I and Category II restructuring: For making reference under CDR I, consent of 20% of
lenders by value is required whereas for making reference of doubtful accounts under CDR II and suit
filed accounts, consent of 75% lenders by value and 60% by number is required.
Stand still clause: Debtors and creditors agree through an agreement called Debtor Creditor
agreement that no party shall take legal action during the standstill period i.e. 90 days (can be
extended to 180 days).
Inter Creditor Agreement: The Inter-Creditor Agreement would be a legally binding agreement
amongst the creditors, wherein they will agree that if 75 per cent of creditors by value and 60 per
cent of the creditors by number, agree to a restructuring package of an existing debt (i.e., debt
outstanding), the same would be binding on the remaining creditors. ICA will be initially valid for a
period of 3 years and subject to renewal for further periods of 3 years thereafter.

Debt Restructuring Mechanism for SMEs

1. The guidelines are applicable to entities which are viable or potentially viable as follows : (i) All
non-corporate SMEs irrespective of the level of dues to banks. (ii) All corporate SMEs which are
enjoying banking facilities from a single bank, irrespective of the level of dues to the bank. (iii) All
corporate SMEs which have funded and non-funded outstanding up to Rs.10 crore under multiple/
consortium banking arrangement.
2. Accounts involving wilful default, fraud and malfeasance would not be eligible for restructuring.
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3. Accounts classified by banks as Standard, Sub Standad and Doubtful only are covered. 'Loss
assets' would not be eligible for restructuring.
4. Viability: Banks should decide on the acceptable viability benchmark. it should be ensured that the
unit becomes viable in 7 years and the repayment period for restructured debt does not exceed 10
years.
5. Time period for restructuring: Restructuring package should be implemented within a maximum
period of 60 days from the date of receipt of request.

The various loan review & monitoring functions shall be as follows:

1) Review of Credit Sanctions made by Each Authority
 Loan sanctions made by each sanctioning authority shall be placed before the NHA for review as
per guideline. Such sanctions include fresh sanctions, renewals and/or enhancements.
2) Mid Term Review (MTR) : Merger of MTR with CMF (302/2014), Periodicity: 6 months from
the date of sanction/ renewal. If the tenability is fixed beyond one year, MTR will be done every 6
months thereon.
3) Asset Sub-classification Code System (ASCC):
 ASCC System is a mechanism to classify borrowers on the basis of compliance to the
parameters indicating the quality of assets and to detect early warning signals of incipient
sickness. Applicable in respect of all borrowal accounts subjected to MTR.
4) Based on the conduct of the account, adherence to various financial parameters etc., the
accounts are categorized into 9 grades viz, Standard Assets ASCC S1 to S4; Substandard Assets
SS; Doubtful Assets 1st year D1; 2nd year - D2; 3rd year - D3; Loss Assets
 Monitoring of Special Watch List Accounts: SWL is an early warning signal to be used to
avoid slippage.
 All accounts displaying unsatisfactory dealings/ early warning signals are put under special
watch list for follow up and time bound actions to prevent slippage to NPA.
 The following types of accounts are reported in the Special Watch list:
i) Running accounts – Where any amount which has fallen due for payment and remains
unpaid for a period of more than 30 days; Where the regular limits/adhoc limit /Adhoc Over
limit or Single transaction limits are not renewed/ reviewed/ regularized beyond 1 month
from due date stipulated in the sanction; Where the drawings are allowed in an account
based on the Drawing Power calculated from stock statements older than 1 month from the
due date for submission;
ii) Bills both demand and usance remaining overdue for more than 30 days from the date of
purchase/ due date respectively; ii) Devolved NFB facilities outstanding beyond 30 days from
the date of devolvement;
iii) Term loans where interest and/or installment of principal remain overdue for a period of
more than 30 days.
 Accounts classified as NPA as per IRAC norms need not be included in this statement.
 The Special Watch list statement is categorized in to 5 Parts namely,
Part A - All Borrowers with limit including and upto Rs 1 lac.
Part B - All Borrowers with limit of > Rs 1 lac including upto Rs 5 lac.
Part C - All Borrowers with limit of > Rs 5 lac including upto Rs 25 lac
Part D - All Borrowers with limit of > Rs 25 lac including upto Rs100
lac. Part E - All Borrowers with limit of > Rs 100 lac.
Monitoring of SWL accounts: i.Parts A to E shall be primarily reviewed at Branches.
(i) In respect of Part B to E, Branch wise/ account wise review of S W L accounts shall be
carried out at Circles.
(ii) Part E (>Rs 100 lac accounts) accounts shall be individually reviewed at CM Wing, H O.
(iii) In respect of accounts requiring rephasement/restructuring, it is to be ensured that
proposals are taken up well in advance so that the decision is received well before the
overdues or irregularities complete 90 days.
Important steps to follow:
1. Download SWL report of your branch and save it.
2. Select (+) sign of customer wise consolidation (+)
sign before PART-A, B, C, D, E will be displayed
3. Click on (+) sign of PART-A and attend each a/c, then select PART B and so on.
4. (You may attend first PART-E then "D” then "C" "B" "A".)

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 5. You may also take print out of the relevant pages (instead of taking whole report)
6. "Dormancy", "Stock statement", "Arrears" is the reasons in running a/c which indicates party is
not transacting. Contact them and convince, look for associated problems and extend helping
hand.
- Dormancy will be removed by credit entry (any amount) comes
- Stock statement feeding to be done correctly and timely.
- Opt CHM06 -à note down Security id and its type
- Feed in the system under option BAM74
- For arrears full overdue amount is to be recovered.
- For TOD over line, amount above the limit granted to be recovered.
- Where limit is expired, immediate steps to be taken to renew it.
7. Please note, first two pages of this report 'WAR Dtls 1-15' & 'WAR Dtls 16-30' are
really WAR list and to be followed on 'war' basis. Already more than 60 days are over
and a/c will slip to NPA shortly. This will help you in making NIL slippage.
8. Make maximum use of below reports.
a) Business Object: a) 280119: a/c appearing in SWL for various reasons, b)
280105: a/c slipping to NPA between two dates,c) 280080: daily slippage /
Upgradation
 Numbers of accounts appear in the SWL for the NON FINANCIAL REASONS i.e. Renewal of
Limit, Dormancy & Stock Statement Review etc., as per BO REPORT ID 280119. These
accounts are leading to unnecessary increase in SWL figures which could have been easily
avoided.
9. As and when SWL report comes, branch should generate ―Report-280119‖ from BO and follow
each & every a/c for early regularization. PDF file from CBS report home page should be
generated and followed from ‗customerwise consolidation‘
10.Excel sheet of SWL report can be generated from CBS Report home page ---- other package
Special Watch mail merge list. (Similarly NPA borrower list may be generated for
mail merge)
Tips: While Updating Stock Statement, plz. follow following steps:
1. Find out the security ID & Security Code from CHM 06 Option.
2. Update the above found Security ID in BAM 74 option.
5) Credit Monitoring Format (CMF) [Merger of MTR with CMF (304/2014)]
All borrowal accounts with total credit (FB+NFB) limits of Rs 1 Cr & above shall be monitored
once in 2 months at branch level not later than 10 days from due date using SSO package.
6) Stock audit reports by external agencies : This audit of inventory stock and book debts
securities will be got done through our bank panel valuers at the prescribed periodicity.

7) Quick Mortality Accounts: Slippage in new accounts with aggregate liability of Rs. 5 lacs
and above and becoming NPA within a period of 12 months from the date of first
disbursement shall be identified and suitable remedial measures shall be initiated by Circle Offices.
8) Credit Monitoring Officers at branches :
 All borrowal accounts with total credit exposure limits of Rs. 1 crore and above (Fund based
+ Non fund based) shall be monitored once in 2 months by an officer in the branch
designated as Credit Monitoring Officer (CMO) for the purpose.
 Circles shall review the functions of CMOs by holding CMO meet every quarter.
9) Credit Audit : All fresh sanctions, renewals with enhancements/additional exposures shall be
subjected to credit audit enjoying fund based and non-fund based working capital limits of Rs.1
crore & above within a period of 3-6 months from the date of disbursement.
10) Quarterly/Half Yearly Operating System (QOS/HOS) : Applicable in respect of industrial
borrowers, merchant exporters, traders, borrowers under SME (both manufacturing and service
sector), etc. enjoying fund based and non-fund based working capital limits of Rs. 5 crore and above
from the banking system.
11) Other credit monitoring tools :
 Monthly Stock Statement cum select operational data (MSOD) -Copy of the same shall
be submitted by the branches to the reviewing authority at Circle Office duly furnishing the
computation of the Drawing Power.
 Stock Inspection reports (SIR) of Branch officials shall be reviewed by the reviewing
authority at branch / Circle office as the case may be.
 Project Implementation Progress Reports (PIPR) for term loans.
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  Lenders' Independent Engineer's Report (LIE) at periodical intervals during
implementation of the project.
 In respect of sanctions made by SME Sections in Circles, SME Sulabhs and
Retail Hubs the respective sanctioning authorities shall monitor the
accounts.

INSPECTION OF STOCK – EXTANT GUIDELINES (Cir 303/2011 dtd. 15.10.2011)

1. In respect of fresh OCC accounts, inspections of godown without fail before release of limits.
2. Branch-in-charge has to ensure equitable distribution of godown inspection among Officers
that each official conducts stock inspection of a particular account 3 times consecutively.
3. At least once in a year, godown shall be inspected by the Manager/ Senior Manager in-charge.
4. Special Watch category/ NPA accounts (non- LPD accounts), Manager / Senior Manager in-
charge shall conduct the godown inspection at least once in 6 months.
5. In the case of VLBs/ELBs and PCBs, apart from conducting inspection of stock by the
Officer/Manager at the prescribed intervals of time, Manager/Senior Manager in charge of
Advances Department shall conduct stock inspection at the following periodicity: Once in a
year in the case of regular accounts; At least once in 6 months in the case of accounts
classified under Special Watch category and non LPD NPA accounts
6. CM, AGM and DGM heading the branches shall conduct stock inspection at least once in a year
in respect of following accounts: High Risk accounts (wherever the accounts are subjected to
Credit Risk Rating), ASCC S3, S4 and non LPD NPA accounts, Accounts which are appearing
in the Special watch category .

FORMAT REDESIGNED : (CIR 322/2011 Dt. 3.11.2011) -

1) NF 585 – Simplified stock statement is since dispensed with.
2) A redesigned simplified stock statement – NF 1003 is introduced.
3) Stock inspection report is also embedded in NF 1003.
4) NF 1003 from all borrowers (industrial and non-industrial borrowers) who are enjoying
SOCC limits upto Rs. 5 lacs and OCC/PC limits upto Rs.10 lacs.
5) Borrowers who are enjoying credit limits (OCC/PC) of above Rs. 10 lacs and who are required
to submit periodical stock statements shall continue to submit the statement in NF 902 – MSOD
cum stock statement.However, there will be no change in the format in respect of Canara Trade
limits.)
7) Since Stock Inspection Report is appended to the redesigned stock statement,
there will be no need to prepare NF 814 (Stock Inspection Report) separately for
limits upto Rs. 10 lacs.
8) Stock statements are to be obtained from borrowers as per the
periodicity prescribed by the sanctioning authorities. SOME
IMPORTANT REPORTS (BUSINESS OBJECT)
1. 280105: A/C Slipping to NPA between 2. 280143: Alert report for Quick
two dates Mortality A/C
3. 280149: List of Out Of Order A/Cs 4. 280119: Reson wise list of SWL A/Cs
5. A00001: A/C Slipped to NPA between 6. Loans and Advances-280024 –for
two dates and continues in NPA limits expiring in the next 2 months

PERIODICITY OF GODOWN INSPECTION AND STOCK STATEMENT

SN SCHEME STOCK STATEMENT STOCK INSPECTION GODOWN
1. Artisan Credit Waived Yearly INSPECTION
Quarterly
2. Card
SOCC Monthly For Industry- Half Monthly
yearly For retail
3. LUCC Waived. traders - Yearly
Annually Quarterly

4. OCC Upto limit of 10 lakh For Industry – Monthly.

only. Monthly For others
– Fortnightly
Where ABS -

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 5. CANARA TRADE Limit Upto 50 lacks Quarterly
– H.Y Above 50
Lacks- quarterly
6. OD SME M,J,S,D Up to 10
Simplified quarterly intervals Upto 10 lakh-
lacks H.Y. Beyond H.Yly Beyond 10
10 lacks quarterly lakh- Quartly
7. MSE PRAGATI Upto 2 lacks Nil. Annually at March At Sanction and
Above 2 lacks- half yearly.
8. MSE UNNATI Quarterly
quarterly Annually at March. At Sanction and
quarterly.

9. MSE SATKAR Inspection of stocks & Unit visit- At the time At Sanction and
of sanction and once in 6 months. half yearly.
10. Doctors choice Quarterly Annual
11. WC
Weavers Waived Waived Half Yearly
Credit Card
12. Canara need not be Inspection &
Contractor submitted PIPR Half
Scheme yearly.
SW L REASO NS AND REMEDY

S.N REASONS MEANING STEPS

1. Arrears- CASA TOD in SB/CA & all OD/OCC accounts Recovery of Arrears
2. Arrears- Agriculture Constitiutes all agriculture a/cs KCC, Recovery of Arrears
Loan KOD, Tractor Loan; dairy loan etc

3. Arrears- Gem Loan Constitiutes all non-agriculture a/cs Recovery of Arrears

Retail lending, LHV etc

4. Erosion in security valu Security value erodes to less than liability Security value to be
of CASA updated in BAM74

5. Erosion in Security Security value erodes to less than liability Security value to be
value- other loans updated in LNM34

6. Stock statement review Stock statement not updated Stock value to be

updated in BAM74

7. TOD overline Liability more than limit/Drawing power Recovery and liability to
bring within limit

8. Dormancy Interest not serviced Recovery/Credit entry

9. Limit Renewals pending Limits not renewed Limit to be renewed
/extended

10. Arrears FCC accounts Arrears in contracts (Bills, LC, PC, Recovery
BG etc.)

COMPROMISE POLICY GUIDELINES ( Cir 189/2015 )

 Accounts eligible for compromise settlement: NPA accounts normally marked for recovery.

Cut off date: Date on which the account was classified as NPA. In exceptional cases, date of
sickness or date of closure of unit or first date of incurring cash loss can be taken as cut-off
date giving justifiable reasons.
SETTLEMENT FORMULA FOR COMPROMISE
1. NON WILFUL DEFAULTERS:
A. Realizable value of security is sufficient to cover the contractual/decretal dues,
Recover the full amount. However, if paying less recover not less than the book liability
plus simple interest @ Base Rate plus 1% as on the date of proposal.
B. Realizable value of securities + net worth (put together) is sufficient recover not
less than the book liability along with simple interest at not less than 1% below the Base
Rate.

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 C. Securities and/or net worth of the borrowers/ guarantor/s/ coobligant/ s is not
sufficient or negligible to cover the Bank‟s dues, it should be our endeavor to recover
the maximum amount possible, keeping in view the realizable value of securities/assets of
borrower/s, guarantor/s, coobligant/s and the time taken for realization of the same.
2. WILFUL DEFAULTERS:
A. Realizable value of security is sufficient to cover the contractual dues; recover the
full amount. However, where the parties are paying less recover not less than the book
liability as on cut-off date along with simple interest at Base Rate plus 2 % as on the date
of proposal
B. Realizable value of securities + net worth (put together) is sufficient, recover not
less than book liability as on the cutoff date along with simple interest at Base Rate plus 1
% as on the date of proposal.
C. Where the securities and/or net worth is not sufficient to cover the dues or
negligible, recover maximum possible,
SETTLEMENT FORMULA FOR COMPROMISE IN RESPECT OF AGRICULTURAL LOANS WITH
LIABILITY BELOW RS.10 LACS CLASSIFIED AS NPA.
 Realizable value of security is sufficient; Recover the book liability + simple interest at
5%(on reducing balance)
 Realizable value of securities + net worth (put together) is sufficient recover book
liability as on the cut-off date + simple interest at 4 %(on reducing balance).
 Realizable value of securities and/or networth is not sufficient or negligible,
recover the maximum amount possible.
CALCULATION OF UNAPPLIED INTEREST FOR INTERNAL PURPOSE:
(i) NPA accounts except decreed accounts, the amount of unapplied interest is :
- Sub-standard assets: At Base Rate plus 0.75 % or contractual rate including penal rate
(whichever is lower) on simple basis
- Doubtful assets: At Base Rate -2% or contractual rate including penal rate (whichever is
lower) on simple basis
- Loss assets: At Base Rate – 4% or contractual rate including penal rate (whichever is lower) on
simple basis from the date of stoppage of interest or cessation of interest on the account becoming
NPA, till the end of the quarter immediately prior to the date of submission of the proposal.
(ii) Decreed accounts, the rate as above applied upto the date of filing of suit and at the rates
awarded by the Court from the date of suit or above rates (as per the classification of account as on
date of proposal) on simple basis whichever is less.
(iii) Sacrifice under the Policy Guidelines is defined as under: The difference between the dues
calculated as defined under (i) / (ii) above (including book liability) and the OTS amount offered
constitutes sacrifice for the purpose of settlement. Time Limit for Payment of Compromise
amount: 12 to 18 month

11.LEGAL ASPECT OF BANKING

LEGAL ASPECTS OF BANKING

Though the Basic concept of Banking (i.e., accepting deposits and granting loans) can never
change, in today’s complex and competitive environment Banking has undergone a sea
change. Bankers have to embrace a lot of other service activities like Internet and Mobile
Banking, Credit Card Business, Mutual fund Business etc

Nevertheless Bankers have to play different roles with different customers. For eg., he is a
Debtor to a Depositor, Creditor to a Borrower, Lessor to a Safe Deposit Locker hirer, a Bailee
in a Safe Custody Transaction and so on. In the process Bankers have different types of
obligations to different types of customers under various enactments.

In the above context Bankers have to ensure compliance of requirements under relevant Acts
like, Banking Regulation Act, RBI Act, Contract Act, Negotiable Instruments Act, Companies
Act, Consumers Protection Act, SARFAESI Act, DRT Act, Right to Information Act etc.

In the above backdrop, details of various types of customers, requirements under Various Acts,

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 197 | P a g e
 Rights of customers, Obligations of banker, various Recovery Avenues available to bankers etc
are discussed in the following pages.
Banker Customer Relationship and Accounts of Customers
1. Banker Customer Relationship
Bank is one which conducts business of banking. Banking has_been defined in Section 5 of Banking
Regulation Act.'Customer is not defined in any Act. However, it is defined in KYC norms. As per various
court decisions, any person for whom bank agrees to open an account is called as customer of the
bank.
Various types of relationships
Type of Transaction Bank Customer
Deposit in the bank (CR balance in account) Debtor Creditor
Loan from. Bank (Debit balance in account) Creditor Debtor
Safe Deposit-Locker Lessor (Licensor) Lessee (Licensee)
Safe custody Bailee Bailor
Issue of draft (after issue of draft) Debtor Creditor
Payee of draft Trustee Beneficiary
Collection of cheque & Standing Instruction Agent P r i n ci p al
Goods left negligently by customer T r u s t e e B e n e f i ci a r y
Purchase of cheque from customer Holder for value Endorser
Purchase/sale of securities on behalf of customer . Agent Principal
Currency Chest on behalf of RBI Agent RBI is principal
Money deposited. No instructions for its disposal. Trustee Beneficiary
Pledge Eavedat el Pawner (Pledger)
Mortgage Mortgage e Mortgagor
Hypothecation Hypothecatee Hypothecator
Assignment Assignee Assignor
2. Banker's Obligations
There are two main duties of a bank i.e (1) Duty to maintain secrecy of customer's account (ii)
Duty to honour cheques.
Duty to maintain secrecy:
1. A bank has duty to maintain secrecy of customer's account as per Implied Contract.
2. Moreover, as per Section 13 of Banking Companies (Acquisition and Transfer of Undertaking)
Act also, the . bank is required not to disclose any information relating to affairs of its
customers.
3. The duty to maintain secrecy continues even after closure of account.
4. Balance in the account of an employee should not be disclosed to employer. Similarly balance in
the account of wife not to be disclosed to husband and vice versa.
5. If bank discloses customer's affair (e.g. in case of insufficient balance in the account advising
the presenter of cheque to deposit deficit amount), bank will be liable to customer for resultant
loss. Exceptions to rule of secrecy:
1. Courts: As per Banker's Book Evidence Act, bank may be required to produce certified copies of
record in the court.
2. Police: Officer incharge of a police station may issue a written order for production of documents
in connection with trial or investigation. Police can even seize records against proper receipt.
3. The information may also be required to be parted to inspector appointed to investigate affairs
of a limited company under section 235/237 or under FEMA.
4. Revenue Authorities: Bank may be required to produce to income Tax Authority, record
pertaining to transaction of a customer. However, roving enquiries should not be made except in
case of cash transactions of Rs 1 lac and above.
5. RBI: As per Banking Regulation Act or RBI Act, Reserve Bank may seek information from bank.
6. Banking Practice: Banks have the practice of sharing information in general among themselves. The
information should be given in confidence and without any responsibility on the part of supplying
bank.
7. Consent of customer: For example, information is given to a Credit Information Company as per
express consent of customer.
8. To protect bank's interest.
Duty to honour cheques
As per section 31of N I Act, a bank is under obligation to pay cheques issued by customer provided
(i) there is a sufficient balance in the account (ii) the cheque is otherwise in order (iii) the funds
are properly applicable i.e. not attached by Garnishee order or attachment order. If a bank
dishonour a cheque drawn by a customer despite satisfaction of aforesaid conditions, bank will be
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 liable to Drawer (and not to payee or true owner) for damages suffered by him.
3. Banker’s Rights: Bank has three rights namely (i) Right of Lien (ii) Right of Set Off (iii) Right of
A4. Right of Lien:
1. Lien is the right of creditor to retain possession of goods and securities belonging to the
debtor till the debts due to him (creditor) are paid.
2. This right is available only on goods and securities and not on balances in the accounts.
3. Lien entitles retention of possession of goads but the creditor cannot sell the goods.
4. Lien can be Particular lien (Sec 170 of the Indian Contract Act) or General Lien. Right of General
Lien, is available only to bankers, factors, wharfingers, attorneys (Section 171 of the Indian Contract
Act).
5. Banker's Lien is also a general lien but it is an implied pledge because the banker has right to retain as well
as sell goods of the borrower after giving him reasonable notice.
6. For exercising right of lien, (a) the goods or securities and debt should be in the same right and
same capacity (b) Loan should be due or overdue and lawful (iii) Reasonable notice is given.
Further, Right of Lien is available on the goods and securities received in the ordinary course of
business.
7. It is not available when the goods or securities have been deposited for a specific purpose; goods
received for safe custody or lying in safe deposit vault or goods left by the debtor negligently.
However, in the case of loans against pledge of jewellery, bank can exercise right of general lien on
the ornaments left in the possession of the bank after adjustment of the jewellery loan in case some
other advance is outstanding.
Negative lien is a declaration from the borrower to the effect that securities/goods offered as security are
not encumbered and that the borrower will not create any charge over them without bank's permission. This
undertaking does not create any charge in favour of the bank and therefore advance against negative lien
are treated as dean advance.
5_ Right of Set Off:
1. Set off is the rigifto combine two or more accounts having debit and credit balance.
2. It is not defined in any Act.
3. This right arises when two parties are debtor as well as creditor to each other i.e. one
account should be in debit and another account should be in credit.
4. In the case of banks, this right arises when wants to combine its loan due from a borrower
with his deposit accounts.
5. For exercising right of set off following conditions should be satisfied (i) Both accounts
should be in same right and same capacity (ii) The debt should be due and not accruing due
(iii) Reasonable notice should be sent to the depositor before exercising set off.
6. Right of set off can be exercised even in case of loans which are time barred.
7. It can be applied on fixed deposit when it matures and not on FD which is not due as yet.
Similarly it can not be applied for adjusting term loan or CC or overdraft which are regular
and not overdue.
8. If a loan is in the name of an individual, set off can be exercised on credit balance in his individual
account and sole proprietorship account. Set off can not be exercised on deposit accounts which are
held jointly with other individuals, or partnership in which.the borrower is partner, or client account
maintained by a solicitor or.account of minor under guardianship where borrower is the guardian or
on the credit balance of a trust in which borrower is trustee.
9. If loan is in joint names, set off can be exercised on credit balance in joint account as well
as credit balance in individual accounts of joint borrowers.
10.If loan is in the name of a partnership firm then set off can be exercised on credit balance in
the name of firm, partners and any other partnership firm which has just same partners as are in
the borrowing firm. 11. For exercising right of set off, all branches of a bank are considered as
one.

6. Right of Appropriation
1. Section 59,60,61 of Indian Contract Act, deal with appropriation of payments.
2. Clayton's Rule is related to appropriation of payments. This rule is applicable in case of
death, insolvency, insanity of a joint borrower or partner or guarantor or retirement of a
partner or revocation of guarantee by guarantor.
3. Clayton's rule is applicable in case of running borrowal accounts like cash credit or overdraft.
As per Clayton's rule, credit entry will set off debits in the chronological order of time. This
means that first item on the debit side will be discharged first by a credit and so on.

07. Garnishee Order

 A Garnishee Order is an order issued by court under section 60 (Order 21, Rule 46) of the Code of

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 199 | P a g e
 Civil Procedure, 1908. Through this order the court attaches the deposit of a particular depositor
with the bank. The bank upon whom the order is served is called Garnishee. The depositor who
owes money to another person is called judgement debtor while the person to whom money is due
is called judgement creditor.
 The court first issues order Nisi requiring the bank to explain as to why the funds in the account not
be utilised to meet the judgement creditor's claim. After this order, the order Absolute is issued
directing the bank to freeze the entire balance or a portion of credit balance in the account of the
judgement debtor.
Upon receipt of Garnishee Order Nisi, the operation in the account are suspended, the bank has to
earmark desired balance in the account of the judgement debtor.
 Garnishee Order applies to existing debts as also debts accruing due i.e. SB/CD/RD/FD.
 Garnishee Order applies only.to those accounts of Judgement Debtor which have credit balance.
 The relationship between bank and judgement debtor is of debtor and creditor. Bank is the
debtor of Judgement Debtor who is a creditor of the bank.
 Garnishee order does not apply to money deposited subsequent to receipt of Garnishee order. It
also does not apply to cheques sent for collection but yet to be realized. But if credit was allowed in
the account before realization with power to withdraw to customer, GO will be applicable on this
amount.
 GamiSheeorder does not apply to unutilized portion of overdraft or cash credit account of the
borrower as no debt is due to judgement debtor.
 Bank can exercise right of set off before applying Garnishee Order.
 Garnishee order is-applicable only if both debts are in same right and same capacity. Garnishee
order issued in a single name does not apply to accounts in the joint names of judgement debtor
with other person(s). But if Garnishee order is issued in joint names, it will apply to individual
accounts also of the same debtors. When Garnishee Order is in the name of a partner it will not
apply to partnership account but when Garnishee order is in the name of firm, accounts of individual
partners are covered.
 Garnishee Order can be served on Head Office of the bank and it can take reasonable
time to communicate the same to its branches,
If amount is not specified in the order, then it will be applicable on the entire balance in the'
account. However, if it is for specific amount, the cheques can be paid from the balance
available after setting aside the amount as mentioned in the Garnishee order.
 Garnishee order is applicable on accounts of deceased persons but not applicable if depositor
declared insolvent.
 Garnishee order not applicable on fixed deposit taken as collateral security.

08. Income Tax Attachment Orders

 Income Tax Authorities issue Attachment Orders in terms of Section 226(3) of Income Tax Act,
1961. On receipt of this order, banker is required to remit the desired amount to income tax
authorities. A order without mentioning the amount is not a valid order. Attachment Order is
different from Garnishee order in following respects (i) Attachment order applies to money
deposited in the account after receipt of order also till it is fully satisfied whereas Garnishee order
does not apply to subsequent deposits. (ii) Attachment Order in single name applies to joint
accounts also proportionately unless the contrary is proved whereas Garnishee order in single
name does not apply to joint accounts.
 In case banker fails to comply with Attachment Order, it will be liable for the amount of order and
deemed as an assessee in default. However, right of set off is available to bank before applying the
order.
 When both Garnishee order and Attachment Order are received simultaneously, priority
should be given to attachment order.
VARIOUS TYPES OF BORROWER S
A. MINOR:
1. According to Indian Majority Act, a minor is one who has not completed 18 years
of age. In case of a minor, whose guardian is appointed by the court, the minority
continues up to the age of 18 years. (earlier it was 21 years) HO CIR 62/06
2. According to section 11 of the Indian Contract Act 1872, any contract with a minor is
void ab initio and the minor cannot ratify the same even after becoming a major.
3. In case of loan granted against deposits standing in the name of minor, we have to
ensure that the purpose for which loan is required is for the benefit of the minor.
B. ILLITERATES:

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 200 | P a g e
 1. Normally left thumb impression should be obtained. If left thumb impression is not
possible or practice of the area is to take right thumb impression the same may be
obtained.
2. There is no need to attest an agreement executed by an illiterate. Below the thumb
impression,a narration reading LT1/RT1 of has to be written.
3. In case of illiterate and also in case of those who sign in other language, it is necessary to
explain the contents of the documents to the party and obtain a letter of
attestation/declarations in NF 821 to the effect by a person knowing the language of the
document.

C. HUF:
1. A joint Hindu family is recognised as a legal entity and is managed and represented in its
dealings and transactions with others by the “Karta”. Karta has implied powers to do
various acts including borrowing and charging of joint family property. Karta cannot create
mortgage or charge HUF property without there being a legal necessity or benefit to HUF.
The liability of the co-parceners is limited to the extent of their interest in the family
property and not beyond that.
2. However, in case of loans sanctioned in favour of joint Hindu family, all members, widows
of the deceased male members, if any and daughters (unmarried and/or married
daughters as the case may be) have been specifically conferred with the property rights
by the state government should join in the execution of documents. On behalf of minor
members their lawful guardian should sign.

D. POWER OF ATTORNEY HOLDERS:

1. Wordings of power of attorney are construed strictly by the courts, and bank must not
allow the agent to exceed his powers. There cannot be an implied authority other than
those specified in the P.A.
2. Original P.A. must be verified to ensure the correctness of its contents
and a copy is obtained for branch records. In case mortgage is involved the registered
P.A. is to be scrutinised by the advocate along with LSR.
3. The Principal should be identifiable and P.A. should be in force. P.A. must specify and
authorise the attorney to do such specific acts to raise loans and execute the relative
documents on behalf of the principal and further, the principal is bound by such acts of
the agent and all the liabilities arising thereof.
4. Branch to get confirmation in writing from the principal while sanction/ renewal of limits
or obtaining AOD etc., stating that the P.A. is valid.

E. PARTNERSHIP:
1. Partnership is the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all. (Section 4 of partnership Act)

2. All partners are jointly and severally liable for all acts done by any partner in the
ordinary course of their business.

3. The implied authority of a partner does not empower him to:

a. Submit a dispute relating the business of the firm to arbitration.
b. Open a banking account on behalf of the firm in his own name.
c. Compromise or relinquish any claim or portion of a claim by the firm.
d. Withdraw a suit or proceeding filed on behalf of the firm.
e. Admit any liability in suit or proceedings against the firm.
f. Acquire immovable property on behalf of the firm.
g. Transfer immovable property belonging to the firm.
h. Enter into partnership on behalf of the firm.
i. Mi n or can be admi tted to th e b en efi ts of partn ersh i p. For de bts of
th e fi rm, on l y hi s share i n th e fi rm i s li abl e.

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 H UF a s P artn er in Partne rsh ip Accou nt
Branches are NOT t o open Current/Term deposit Accounts of Partnership firms where
one or more partners are HUFs
In respect of partnership accounts already opened, in current/term deposit account,
where one or more of the partners are HUFs, branches to exercise caution in the
transactions.
No Fresh financing shall be provided to partnership firms where one or more of the
partners are HUFs.
In respect of existing parties who are enjoying credit facilities with the Bank, the
respective sanctioning authority may take suitable decision with regard to continuation or
otherwise of the credit facilities at the time of renewal of limits based on merits of each case.
In case where it is decided to continue the credit facilities, a consent letter (as per the
prescribed format) should be obtained from the members of HUF including karta and preserve
the same along with the loan papers.
F. CLUBS, SOCIETIES, ETC:
These bodies are not legal entities and have no capacity to contract. In case any loan facility is to
be granted as a special case the following procedure should be observed. Bye-laws of the society
should be scrutinised as to the powers to borrow for the purpose asked for.
1. Powers of the Managing Committee to charge the assets of the society to be obtained.
2. A resolution should be obtained.

G. LIMITED COMPANY:

1. Limited Company is a separate legal entity in the eyes of law. The company is different
from the persons representing the company.
2. The provisions as per companies act, Memorandum of Association and Article of
Association are to be complied with.
3. The Memorandum of Association circumscribes the permitted range of a company’s
activities. Any act beyond the objects, mentioned in the Memorandum, i.e. ‘Ultra Vires’, is
void and cannot be rectified.
4. Hence the “ object clause” of the Memorandum is to be verified to ensure that the
purpose for which loan is applied for, is within the objects of the company.

NEGOTIABLE INSTRUME NTS ACT, 1881

1. An instrument which can be transferred by delivery of endorsement and delivery and

which gives better title to transferee than that of the transferor
2. As per Sec 13 of NI Act Pronote, Bill of Exchange, Cheque, are Negotiable
Instruments. As per sec 85(a) of NI Act Bank DDs are Negotiable instruments.

3. As per Custom/Usage/Court Decisions GP Notes, Treasury Bills, Commercial

Papers, Certificate of Deposits, Bill of Lading, Hundis, RRs, Dock Warrants Warehouse
Receipts, are Negotiable Instruments.
4. LR, Air way Bill, Delivery Order FDRs etc are not negotiable instruments
5. As per Sec 31of RBI ACT 1934 no person other than RBI/ CENT GOVT CAN
DRAW/ACCEPT/ISSUE/MAKE BE/HUNDI/PN PAYABLE TO BEARER ON DEMAND. (BECAUSE
IT BECOMES CURRENCY) EXCEPTION CHEQUE CAN BE ISSUED TO BEARER ON DEMAND.
6. Exception: cheque payable to bearer.7. B/E, P/N endorsed in blank,
AS PER SEC 21 OF CURRENCY ACT CURRENCY NOTE IS NOT PRONOTE/BILLS OF EXCHANGE
1. Pronote (Sec 4) it is an unconditional Undertaking signed by maker to
pay a certain sum of money only to or to the order of a certain person or bearer.
2. Maker is Drawer, Liability is primary It absolute.
3. Bill of Exchange (Sec 5). Unconditional Order signed by maker directing a certain person to
pay certain sum of money to a certain person or to the bearer. Three Parties Drawer,
Drawee, Payees. Drawee can be acceptor It his liability is primary after acceptance
4. Maker is Drawer- Liability is Secondary It conditional.
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 5. Drawer ItPayee or Drawer It Drawee may be same person.
6. Cheque (Sec 6) it is a B/E always drawn on a specified Banker payable on demand
(always on banker. Valid for 6 months as per practice (indirectly mentioned as per sec
138 of NI Act)
SPECIAL FEATURES OF A CHEQUE

1. It need not be stamped

2. It can be crossed
3. It can be countermanded
4. Inchoate (incomplete) Instruments (Sec 20) as to date, amount, and payee can be
completed by Holder in Due Course.
5. Holder (Sec 8) is a person entitled to the possession of Negotiable Instrument
in his own name.
6. Holder-in-due-Course (Sec 9) A Holderforvaluable It Lawful consideration
received in good faith before its due date without having sufficient cause to believe that
defect existed in title. Endorsees of not negotiable /a/c payee crossed/ restrictive/
forged end cheques are not holders in due course
7. Payment in due Course (Sec 10) Payment as per tenor of the instrument in good faith
and without negligence. Payment of postdated cheque and payment after business hours
are not payment in due course.
8. Days of Grace is given for Bill of Exchange ( Sec 22).WHEN DUE DATE

ALREADY CALCULATED LIKE CD/CP NO DAYS OF GRACE.

9. General/Blank Endorsement (sec16)-Only signing by PAYEE/ENDORSOR
10. Full/Special Endorsement (Sec 16) Writing Endorsee‟s name and signed by
Endorser/payee.
11. Restrictive Endorsement (Sec 50) restricts further endorsements. PAY A ONLY.
12. Sans Recourse Endorsement (Sec 52) relieves Endorser from his Liability.

13. Facultative Endorsement (Sec 52) The Endorser waives notice of dishonour.
14. TIME FOR ACCEPTANCE 48 HOURS EXCLUDING PUBLIC HOLIDAYS (SEC 83). If the bill
matures on a pub holiday it is due on previous business day. (Public holiday includes Sunday
It declared under NI Act (sec 25)
15. Negotiation Back – When an Endorser after negotiation becomes holder again.
16. Holder for value. When Banker allows drawings against the cheque sent for collection
pending realization Banker is holder for value. (But in this case banker will not get
protection).
17. General Crossing (Sec 123) simply drawing two traverse lines.
(PARALLE LINES IMPORTANT)
18. Special Crossing (Sec 124) Writing a name of Bank It crossing. NAME OF THE BANK
IMPORTANT.
19. Not negotiable crossing (sec 130) WRITING WORDS “NOT NEGOTIABLE” and crossing IT IS
EQUAL TO GL CROSSING it does not prohibit transfer but transferee does not get better title.

WHO CAN CROSS (sec 126)

1. Drawer/Holder can cross. Banker can cross on another banker WHEN COLLECTING FOR 1ST
BANK (SEC 127)
2. Protection to paying banker BEARER CHEQUE 85(2) ORDER CHEQUE

85(1) CROSSED CHEQUE (128) provided payment is in due course. It it is available even if
endorsement is forged. 85(1) BANK DRAFTS 85 (A), Once a bearer always a bearer 85 (2)
endorsement has no effect
1. Where material alteration does not appear to be altered It payment is in due
course paying banker is protected (SEC 89)
2. BUT IF DRAWER‟S SIGNATURE IS FORGED/ IRREGULAR ENDORSEMENT OR IF IT IS STALE
CHEQUE NO PROTECTION IS AVAIALBLE. FORGERY CONFERS NO TITLE SEC 58(1)
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 3. Protection to Collecting Banker (Sec 131) When a Crossed Cheque is collected as agent
for customer who is properly introduced and in good faith without Negligence
4. 131(A) GIVES PROTECTION FOR COLLECTION OF BANK DD.

SEC (99) NOTING

When cheque is dishonoured the notary presents again and on dishonour he notes the fact on
the bill or in a paper attached or partly on both.

SEC 100 PROTESTING

It is a certificate given by the notary containing the fact of dishonour it is an authentic evidence
for dishonour.
NOTING AND PROTESTING IS COMPULSORY FOR FOREIGN BILLS AND NOT INLAND BILLS

SECTION 138 TO 142 OF NI ACT (CRIMINAL ACTION)

- When a cheque issued in returned for want of funds the Drawer of cheque is liable for criminal
action which may resultin imprisonment for 2 years of twice the amount of cheque of both

INDIAN CONTRACT ACT

1. BANKERS‟ LIEN: Generally Lien is an indirect Charge.

2. Sec 171 deals with the Banker’s Lien which is General Lien and it amounts to Implied
pledge and can be enforced on all goods and securities entrusted to him in the ordinary
course of Business and where mutual demand exist between customer and banker.
3. It cannot be exercised on Safe Deposit Lockers, Articles received under Safe Custody,
Articles received under Trust, Borrower left the articles inadvertently in the bank
premises etc.
4. In respect of Credit balances banker can exercise Right of Set off

PLEDGE (Sec 172): It is Bailment of goods and Possession is given to the Creditor (i.e., banker
) till the Loan is cleared and Creditor can sell the goods pledged after giving Due Notice to the
Debtor (Sec 176) In respect of Loans to Companies under pledge Charge need not be registered
with ROC.

HYPOTHECATION: Charge in or upon movable property, existing or future , created by a

borrower in favor of a secured creditor (Bank) with out delivery of possession of the moveable
property to such creditor , as a security for financial assistance and includes floating charge in to
fixed charge o movable property . The same is defined in SARFAESI Act. In respect of Loans to
Companies under hypothecation charge is to be registered with ROC.

ASSIGNMENT: It is transfer of right, property or debt by one person (Assignor) to another

(Assignee) other than mortgage, pledge, hypothecation). Eg are Assignment of Book Debts, LIC
Policy, FDR VSL, Future income (in respect of Education Loan) etc. Nomination gets cancelled
after assignment. In case of Legal Assignments it should be in writing and notice is to be given
to the Debtor by the Assignor and the Debtor has to assent for the same either expressed or
implied.
INDEMNITY: Sec 124 deals with Indemnity. It is a contract where one person promises to
save the other from loss caused to him by the conduct of Promisor himself or by any other
person. Usually it is obtained while issuing Duplicate DD, Deposit Receipt Settlement of
Minor’s Shares in Death claim, in LSR etc. Here there are only two parties called Indemnifier
(Promisor) It the Indemnified. (Promisee)

GUARANTEE: Sec 124 to 126 deals with the same. It is a contract to perform or discharge
the liability of a third person in case of his default. Here there are 3 parties. (Promisor is
called Guarantor or Surety. To whom it is given is called the Creditor. On whose behalf it is
given is called the Principal Debtor. After payment of the Debt by Guarantor he gets all the
rights of the Creditor which is known as Right of Subrogation.
When Bank issues guarantee it includes Protective Clause.
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 GARNISHEE ORDER: It is an order obtained by Creditor attaching the deposits held by the
Judgement Debtor (even if he is deceased) with the Bank. It attaches all deposits held as on the
date of order up to the amount mentioned in the order whether the deposit has matured or not.
It does not attach future credits which are to be accommodated in a separate a/c opened by a
customer. Garnishee Order does not attach future debts. First the Court issues Order NISI
asking the Bank as to why the amount should not be attached. At this juncture the Bank usually
exercise right of set off and informs the balance if any available to credit of the customer to the
Court. Then the Court issues Order Absolute.

1. It does not attach joint a/cs if order is against one of the a/c holders.
2. It is applicable only up to the amount mentioned in the Order and not beyond that
amount.
3. If cheque is presented in clearing & time for return has expired that amount of cheque is
not attachable.
4. It does not attach unutilized amount in OCC/OD.
5. It does not attach amount deposited after the order.
6. It does not attach the payments already made before receipt of Order and amount of
TTs already sent .
7. It is not applicable to amount held by an insolvent as the same is vested with Official
Receiver.
8. It does not attach amount held in other capacities such as under Trust, Safe Deposit Locker,
Safe Custody, Cheques/Bills sent for collection, sale proceeds of shares /debentures still to
be received uncleared balances in SB/CA.

ATTACHMENT ORDER: It is issued by Statutory authorities like Income Tax, Sales Tax,
Wealth Tax, DRT etc. Bank can exercise Right of Set Off and pay the balance amount when
demanded by the authorities. If the Bank does not pay the amount Bank will be treated as
Assessee in Default and authorities will take
appropriate action.

CONSUMER PROTECT ION ACT 1986 (COPRA)

This Act has been passed to protect the consumer from any deficiency in service by banks and
also to compensate the loss suffered by him on account of the same
1. DEFICIENCY means any fault, imperfection, shortcoming in quality/nature/ manner of
service. Complaint has to be filed within 2 years from cause of action.
2. District forum- claims UPTO ` 20 lacs.
3. State Commission – claims of ABOVE `20 lacs UPTO `1 cr
4. National Commission- Claims of ABOVE `1cr
5. Bank has to file its version within 30 days of notice.
6. Non-compliance of orders will attract a fine of up to `10000 or imprisonment of 3 years or
both.
7. Appeal to be filed against orders of District Forum in State forum after depositing 50% of
amount granted by the District forum of `25000 whichever is less.
8. Appeal against Orders of State Forum can be filed in National Forum after depositing 50%
of amount granted by State forum or ` 35,000 whichever is less.
9. Appeal against the orders of National Forum can be filed before Central Consumer
Protection Council after depositing 50 % of decreed amount by the National Commission or
` 50,000 whichever is less.
10. Limitation for filing of appeal is 30 days from the orders.

BANKING OMBUDSMAN
It is another forum for customers to represent deficiency in service and seek remedy. Banking
Ombudsman is appointed by RBI
1. Customer has to first write to the Bank. If the Bank has not replied within 1 month or
rejected the complaint or if the reply of the Bank is not satisfactory then he can prefer
complaint with Banking Ombudsman.
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2. Now matters relating to Debit Card/ ATM/ Credit Cards etc also have been included.
Jurisdiction will be based on billing address.
3. Non/delay in disbursement of pension, levying charges without notice, refusal to accept/delay
in accepting taxes, forced closure of deposits, refusal to close the deposits, Non-adherence to
fair practice code etc are also now included.
4. Limitation for filing complaint is 1 year from the date of reply from Bank.
Award by Banking Ombudsman would be actual amount of loss or ` 10 lac whichever is less. Bank
has to settle complaint within 1 month of receipt of the same from the Banking Ombudsman. Any
person aggrieved by the Award may prefer an appeal within
30 days before Appellate authority (RBI Deputy Governor). If the Banking
Ombudsman is satisfied he may grant a further period not exceeding 30 days for preferring
appeal. In case Bank has to file appeal they have to obtain permission of CMD and in his absence
permission of ED for preferring appeal.

R E J E C T I O N O F C O M P L A I N T : T h e B a n k i n g O m b u d s m a n m a y r e j e c t a complaint at
any stage under certain circumstances
RIGHT TO INFORMATION ACT
1. It is available to Indian citizen to access the information including inspection under control
of public authorities (Sec 2-J).
2. It covers various public authorities like railways, telecom, postal, passport, banking etc
(Sec 2-H).
3. Information means material in any form like records, documents, memos, circulars, e-mails,
opinions, advices, press releases, log books, contracts, samples, models data materials
relating to any private body that can be accessed by a public authority under any law for
the time being in force ( Sec
2-F).
4. Each CO will have Public Information Officer (PIO) Et Chief Information Officer (CIO) at
HO.
5. Application may be in Hindi/English and if request is oral, PIO has to assist to reduce the
same in writing. Also assistance to be given to sensorily disabled persons.
6. PIO has to furnish or reject with reasons within 30 days of receipt of request. If rejected
PIO has to give reasons along with particulars/ details/scope for appeal.
7. Any person aggrieved by the decision of PIO has to file appeal to chief information officer at
ho within 30 days from the date of receipt of decision of PIO.
8. A Second Appeal against the decision of CIO may be filed within 30 Days before Central
Information Commission Set up by the Central Government.
9. Central Information Commission has powers to require the Bank to take such steps for
compliance, compensate the Applicant, impose penalty of R s 250 per day of delay with a
maximum of R s 25,000/= (for refusal to receive application, malafide denial etc).
10. No Suit/Legal action shall lie on any person for any action under the act done in good
faith. (Sec 21).
11. RTI Act has overriding effect on any other law.

TEST YOURSELF : LEGAL ASPECTS OF BANKING

1. The following is a primary function of a Bank

a) Acceptance of Deposits b) Granting Loans c) Investment d) All the above e) None
2. The following instrument is to be witnessed
a) DPN b) Agreement c)Sanction Letter d) All the above e) None of the above
3. The validity period of cheque is –
a) 3 months b) 9 months c) 12 months d) 6 months e) None of the above
4. A Garnishee order is issued by a
a) Competent court b) Municipal authority c) Panchayat Office d) All the above e) None of
the above
5. The following is a Negotiable Instrument
a) Bill of Exchange b) Cheque c) Promissory Note d) All the above e) None of the above
6. The CERSAI is a package for registering EMT transaction

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 206 | P a g e
a) All EMT transaction from 31.3.2011 b) All EMT transactions prior to 31.3.2011 c) Other
agriculture EMT transactions d) All the above
7. The Banker can violate the duty of secrecy when –
a) Implied and Express consent of customer b) In the interest of Bank c) In the public interest d)
When the laws of land required to PRIORITY SECTOR, do so e) All the above
8. The Who is the competent Authority for Locker death claim settlement of deceased customer?
a) Branch in charge b) DM (RO) c) AGM (RO) d) DGM (CO) e) None of the above
9. Protective Clause is applicable to –
a) Bank Guarantee b) Pronote c) Cheque d) All the above e) None of the above
10. In Housing Loan security is created by
a) Mortgage b) Pledge c) Assignment d) Lien e) None of the above
11. AOD is to be obtained
a) W ithin 1 year b) Within 2 years c) Immediately after completion of 24 months but within 36
months d) Within 11/2 years e) None of the above
12. Stamp duty for the following document is determined by the amount except for
a) AOD b) Bill of Exchange c) Pronote d) All the above e) None of the above
13. Stamp duty not to be affixed in a „Receipt‟ upto
a) Rs.5000/- b) Rs.500/- c) Rs.2500/- d) Rs.1000/- e) None of the above
14. Agreement is to be stamped with –
a) Revenue Stamp b) Court fee Stamp c) Non-judicial stamp d) All the above e) None
15. Nominee cannot be a –
a) Society b) Association c) Trust d) All the above e) None of the above
16. Nomination facility is not available in case of
a) Savings A/c. b) Current A/c. c) Loan A/c. d) Safe Custody article e) All the above
17. Material alteration can be authenticated in CTS Cheque
a) Initials of transfer of cheque b) Even authenticated with full signatories not accepted c) Full
signature of one of the full authorized signatories of account d) All the above e) None of the above
18. Late cash can be accepted upto –
a) Rs.10000/- b) Rs.25000/- c) Rs.50000/- d) Rs.100000/- e) No Limit
19. In case of Safe Deposit Lockers the relationship between Banker & Locker Holder is
a) Debtor and Creditor b) Hirer & Hiree c) Lessor & Lessee d) Bailor & Bailee e) None of the above
20. In case of Safe custody Articles the customer -Banker relationship is
a) Debtor & Creditor b) Hirer & HIree c) Lessor & Lessee d) Bailor & Bailee e) None of the above
21. In case of deposit the relationship between Banker & Customer is
a) Debtor & Creditor b) Hirer & Hiree c) Lessor & Lessee d) Bailor & Bailee e) None of the
above
22. Who can give stop payment of a cheque
a) Drawer b) Payee c) Drawer & Payee d) Holder e) None of the above
23. Cancellation of crossing can be done by
a) Drawer of cheque b) Holder in due course c) Banker d) All the above e) None of the
above
24. No protection is available to Paying Banker against
a) The forged signature of payee b) The forged signature of endorser c) The forged signature of
drawer d) The forged signature of Endorsee e) None of the above
25. An undated cheque can be filled with a date by
a) Payee b) Holder in due course c) Paying Banker d) All the above e) None of the above
26. A cheque becomes stale on completion of –
a) 3 months from the date of cheque b) 6 months from the date of cheque c) 12 months from the
date of cheque d) 9 months from the date of cheque e) None of the above
27. The monetary jurisdiction of DRT (Debt Recovery Tribunal) –
a) Upto Rs.10 Lac b) Above Rs.10 Lac c) Rs.10 Lac and above d) Upto Rs.5 Lac e) None of the above
28. What is the maximum period that can be stipulated under “SARFAESI” Notice
a) 60 days b) 45 days c) 90 days d) 120 days e) None of the above
29. For dishonour of cheque for want of funds, the drawer is liable for
a) Imprisonment upto 2 years b) Fine upto twice the amount of cheque c) Both 1 & 2 d )
Imprisonment upto 3 years, e) None of the above
30. NPA is a concept of :
a) 90 days b) 180 days c) 120 days d) 30 days e) None of the above
31. Lok Adalat is -
a) Legal Authority b) Govt. Authority c) Local Authority d) Revenue Authority e) None of
the above
32. Probate means –
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 207 | P a g e
a) Original will b) The letter of administration c) The confirmation of Will from Court d) PA given to
Trustee e) None of the above
33. In case of Nomination, what is the power of Branch-in-charge to settle death claim?
a) Rs.25000/- b) Rs.10000/- c) Rs.50000/- d) Unlimited powers e) none of the above
34. EC (Encumbrance Certificate) is obtained for last years in case of Housing Loan
a) 13 years b) 15 years c) 10 years d) 5 years e) none of the above
35. Executor is appointed by
a) Author of Will b) Court c) Trustee d)Guardian e) None of the above
36. Administrator is appointed by
a) Author of Will b) Court c) Trustee d) Guardian e) None of the above
37. In case of loan from Bank relation between Customer- Bank is
a) Debtor - Creditor b) Creditor - Debtor c) Agent- Principal d) Bailor- Bailee e) Non of
the above
38. Minor cannot open and operate accounts before attaining age even if he is literate.
a) 21 years b) 18 years c) 16 years d)12 years e) 10 years
39.In case of Joint accounts all persons signatures are required for
a) opening the account b) closure of account c) making or alteration of nomination, d)
premature payment of term deposit. e) All above
40. Memorandum of Association is required in case of opening of following account
a) Public Ltd company account b) Partnership account c) Proprietorship account d)
Public ltd and Pvt Ltd company account e) HUF account

LEGAL ASPECTS OF BANKING ANSWERS

1 2 3 4 5 6 7 8 9
d a a a d d e d a
10 11 12 13 14 15 16 17 18
a c a a c d c b e
19 20 21 22 23 24 25 26 27
c d a a a c d a b
28 29 30 31 32 33 34 35 36
a c a a c d a a b
37 38 39 40
a e e d

12. OFFICIAL LANGUAGE

Official Language Act 1963 (amended in 1967) and Official Language Rules govern the use of Hindi
in public sector banks (and not the private sector banks). Hindi was accepted as official language in
India, on Sept 14, 1949.
Monitoring of progress : Monitoring is done by Deptt. of Banking Operations and Development.
Classification of Regions : Various States/UTs have been categorized into 3 regions:
Region-A : HP, Haryana, Rajsthanm MP, Bihar, UP, Uttrakhand, Jharkhand, Chattisgarh, UT of
Delhi, Andaman & Nikobar Island
Region-B : Maharashtra, Gujarat, Punjab & UT Chandigarh.
Region-C: All other remaining States & UTs.
Display of Boards:
 All sign boards, counter boards, Bank name board, other boards, placard etc. should be in Hindi,
besides English.
 Banks to display notice boards. at branches in Hindi speaking areas to the effect that forms etc.
filled in Hindi are entertained.
 Name/designations boards ofoffices,
departments, divisions and officials of the banks to be displayed bilingually in offices in Region A &
B.
Official Language Implementation Committee:
 OLIC should be set up at the HQs, offices and branches of banks. Branch Manager to be ex-officio

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 208 | P a g e
 chairman of the committee. Hindi Officer and in his absence any other officer, to be secretary and
other members from different sections. Committee to meet once in a quarter.
 OLIC meeting convened by RBI to be attended by officials at Senior levels.
 Hindi divas - To be observed on Sept 14. Reply to letters in received in Hindi
 Under Rule 5, Letters received in Hindi to be replied in Hindi All Regions A,B&C uniformly - 100%
Preparation of bilingual training material All Regions A,B&C uniformly - 100%
Original correspondence in Hindi
Region "A" Region "B" Region "C"
From From From
1. "A" to "A" - 100% "B" to "A" - 90% 1. "C" to "A" - 55%
2. "A" to "B" - 100% "B" to "B" - 90% 2. "C" to "B" - 55%
3. "A" to "C" - 65% "B" to "C" - 55% 3. "C" to "C" - 55%

OFFICIAL LANGUAGE : SOME MORE FACTS

1. The Hindi was declared as Official Language of Union on 14.09.1949. The Official
Language Policy came in force with effect from 26.1.1950. The Act was passed in the
year 1963. Official Language Rules are applicable to all states and union territories
except Tamil Nadu.
2. The Parliamentary Committee on Official Language has to be constituted with 30
members – 20 from Lok sabha and 10 from Rajya Sabha.
3. Official Language Rules were framed in 1976
4. As per Rule 5 of OL Rule, a letter received in Hindi is to be replied in Hindi.
5. Indira Gandhi Official Language Award Scheme given by Government to Ministries,
Banks, Financial Institutions for using of Hindi
6. All branches to have Official Language Implementation Committee with branch head
as the Ex-officio Chairman. At least . One meeting every 3 months. (First month of
every Quarter)
7. The OL Committee has to be reconstituted every year.
8. As per Section 3(3) of OL Act 1963, certain specified Documents like general orders,
instructions, circulars, notices etc have to be issued invariably in Hindi and English.
9. Hindi Day is celebrated on 14th September every year – to commemorate the
constitutional recognition accorded to Hindi as the Official Language on 14.9.1949.
10. In Parliament, Hindi & English are used for transaction of business.
11. Script of official language Hindi is Devanagari
12. Numerals in Official Language is International form of Indian numerals for e.g. 1, 2, 3
13. hen 80% of the staff members attain working knowledge in Hindi in a branch/office,
the name of the branch/office will be notified in the gazette under Rule 10(4)
14. Rule 11 specifies that manuals, codes, stationery items etc should be in Bilingual
15. As per Rule 12, responsibility of compliance of Official Language rules lies with the
administrative head
16. The order of language in the name plates of our Bank in Region B & C should be
Regional Language (Official Language of the State), Hindi (Official Language of the
Union) and English.
17. Periodicity of OLIC meetings – quarterly – calendar quarter
18. Town OLIC – TOLIC meetings – once in 6 months.
19. 50% of total library budget should be used for purchase of Hindi Books
20. If any staff member passes Banking Pragya, it will be treated that he possesses
working knowledge in Hindi

TEST YOPURSELF : OFFICIAL LANGUAGE

1. Hindi is theof our country. a) National Language , b) Regional Language c) Official Language , d)
Link Language, e)None of the above
2. Hindi is written in script. – a. Sanskrit , b. Urdu, c. Arabic, d. Devanagiri, e.Roman
3. Hindi day is celebrated on of every year. a) 14th January, b) 26th August,c)14th September
d) 30th September e) 15th August

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4. Rubber stamps are prepared in
a. Hindi & English ,b.Regional Language c. Hindi, d.English e.None of the above
5. Name boards of the Banks in non-Hindi speaking areas are inlanguages.
a. One , b.Two c.Three d.Four e.Five
6. The quarterly statement regarding use of OL in our Bank is
a..PSR 11 b. STR 18 c.STR 11 d.PRR 18 e. None of the above
7. What is the IT package available in our bank for carrying out Banking work in Hindi in CBS a.
Unicode, b. Flexcube c. Script magic d. Akruthi, e. None of the above
8. As per Official language Act county is divided into regions
a.One b. Two c. Three d. Four e. Five
9. Letters received in Hindi should be replied 100% in Hindi in region
a. A b. B , c.C d. All the above , e.None of the above.
10. is the award given to employees for usage of Hindi in Official work.
a. Canara Bank Rajbhasha Akshay Yojana
b. Canara Bank Rajbhasha Puraskar Yojana
c. Canara Bank Rajbhasha Akshara Yojana
d. Canara Bank Rajbhasha Samman Yojana e) None of the above
ANSWERS
1 2 3 4 5 6 7 8 9 10
c d c a c b c c d b

13.CROSS SELLING/ THIRD PARTY PRODUCTS

FOCUS ON 3RD PARTY PRODUCTS
100% Branch Activation for all third party products.
100% coverage of Insurable assets with United India Insurance Co. Ltd.
Organizing EXPOs at Industrial Tech Parks / Estates & SEZs to generate leads for general insurance
and other Third party products.
Observing “Help our Customer Day” on 5th of every month with an objective to cover at least one
family per branch with Health Insurance on that day.
Achievement of all Third Party year end Targets to augment our Feed Based Income. Target “HNI”,
“Upper Middle Class” and “Tech Savvy” clients for aggressively marketing of Demat/ OLT

BANCASSURANCE
SOCIAL SECURITY SCHEME (3S)
PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA ( Cir: 214/2015 )
 Life insurance cover for death due to any reason; One year cover, renewable from year to year;
Offered / administered through LIC and other Life Insurance companies
 Scope of coverage: Savings bank account holders (through one savings bank account only);
Age 18 to 50 years; Aadhar would be the primary KYC
 Benefits: Rs.2 lakhs is payable on member’s death due to any reason
 Premium: Rs.330/- per annum per member;Auto debit facility
 Termination of assurance: On attaining age 55 years (age near birth day) subject to annual renewal
up to that date (entry, however, will not be possible beyond the age of 50 years).
PRADHAN MANTRI SURAKSHA BIMA YOJANA - Cir:215/2014
 Accident Insurance Scheme-offering accidental death and disability cover for death or
disability on account of an accident; One year cover, renewable from year to year
 Scope of coverage: All savings bank account holders (through one savings bank account only); age 18
to 70 years ; Aadhar would be the primary KYC
 Premium: Rs.12/- per annum per member; Auto debit facility Benefits.
Table of Benefits Sum Insured
a . Death Rs. 2 Lakh
b . Total and irrecoverable loss of both eyes or Rs. 2 Lakh
loss of use of both hands or feet or loss of
sight of one eye and loss of use of hand or
foot
c . Total and irrecoverable loss of sight of one Rs. 1 Lakh
eye or loss of use of one hand or foot

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 210 | P a g e
  Termination of cover: On attaining age 70 years (age nearest birth day).
ATAL PENSION YOJANA -Cir 216/2015
 Social security to the UNORGANIZED SECTOR WORKERS
 Government of India Scheme; Administered by PFRDA; NSDL would act as CRA ;
Institutional framework of NPS for enrolling the subscribers
 Auto debit facility to accounts
 Commencement of the scheme will be 1st June 2015
 ELIGIBILITY :Bank account holders, who are not members of any statutory social security scheme ;
Mainly targeted at unorganized sector workers, traders, self employed, agriculturists ; The existing
subscribers of Swavalamban Scheme would be automatically migrated to Atal Pension Yojana, unless they
opt out; Age: Minimum age while joining is 18 years; Maximum is 40 years
 PERIOD OF CONTRIBUTION: Pension payment commences at the age of 60 years; Minimum
period of contribution is 20 years or more
 CO-CONTRIBUTION BY THE GOVERNMENT TO EACH SUBSCRIBER: 50% of subscriber’s contribution or
Rs.1,000 per annum, which ever is lower ;The pre-conditions for co-contribution are that the subscriber
should join the NPS Scheme before 31st Dec 2015 and that the subscriber is not a Income Tax payer
 The benefit of fixed pension is guaranteed by the Government

CANARA HSBC ORIENTAL BANK OF COMMERCE LIFE INSURANCE

SMART LIFE LONG (WHOLE LIFE)
Age of entry- Min 7 yrs max-65; Age of maturity: at policy anniversary immediately after life assured’s 99th
b’day.; policy term: up till age 99; premium paying term: min 10yrs max upto age 99 yrs; Mode:
monthly/annual; Annualised premium: Montly-Rs 3000p.m;annual-25000p.a;Min sum assured- age of
entry<45-0.5XTX Annualised Premium; Age of entry>=45:- 7 times Annualised premium (T=70-entry age);
Death benefit: FV or SA(Higher value); Maturity Value- Fund value; Tax advantageon premium paid and
benefit received

SMART GOALS (ENDOWMENT PLAN)

Age of entry- Min 8 yrs max-64; Age of maturity:Option1- min 10 yrs , max 74 yrs; Option 2-min 23 yrs,
max79
yrs; Policy term:Option1- 10 yrs fixed; Option2-15,20,25 yrs; Mode: monthly/annual;
Annualised
premium:Option1- Monthly mode: Rs 5000p.m;Annual mode- Rs 50000p.a.; Option 2- monthly mode- Rs
3000p.m;annual mode-RS 25000p.a.;Min sum assured- age of entry<45- 10 times Annualised Premium or
0.5XTXAnnualised premium whichever is high; for Age of entry>=45:- 7 times Annualised premium
(T=Policy term); Death benefit: FV or SA(Higher value); Maturity Value- Fund value; Tax advantageon
SMART MONTHLY INCOME PLAN
A Traditional Plan providing Life cover for 25 years by paying premiums for 15 years only.; Guaranteed
Monthly Income for 15 years, starting 11th year onwards.; Loan facility available to meet emergent needs.;
Set-off facility to adjust premiums from income receivable during 11th to 15th year.; Get tax free gteed
monthly income for 15 yrs. Min monthly income is Rs 2000 (x100 thereafter); Age of entry- Min18 yrs max-
55 yrs; Age of maturity:Max 80 yrs; Policy term:25 yrs; Mode: monthly/annual (only thru SI/ECS);
Annualised premium:based on monthly income, Premium frequency and age;.;Min sum assured- Rs 2 lacs
;SA is 100 times the choosen montly income;

FUTURE SMART (CHILD PLAN)

Triple benefit: Insurance amt at death, Future premium waived, Final maturity paid to beneficiary; Age of entry-
Min 18 yrs max-60 yrs; Age of maturity:max 70 yrs; policy term: 10yrs/15 yrs/ 20 yrs/25 yrs ,limited pay option
available for 15 yrs/20 yrs/25 yrs; Premium paying term:Regular-10yrs/15 yrs/20 yrs/25 yrs, limited pay- 10
yrs to regular; Mode: Annual; Annualised premium:Min 50000 for 10 yrs PPT and Term 25000/-, for rest of the
terms max- No limit; Min sum assured- age <45 yrs :-10*AP age >=45 -7*AP; Death benefit: Future premium
paid by the co+ SA; Maturity Value- FV.

SHUBHLABH

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 211 | P a g e
 Py premium just once and get insurance cover for at least 5 yrs or more; Age of entry- Min 7 yrs max-70 yrs;
Age of maturity:Max 80 yrs; Policy term: 5 yrs to 40 yrs; Premium paying term: Single; Mode: One time;
Annualised premium:Min 3 lacs max –no limit;Min sum assured- age <45-125%*SP, Age>+45:-110%*SP;
Death benefit: FV or SA(Higher value); Maturity Value- Fund value;

“SMAR T STAGE MONEY BACK PLAN”(SSMB)

1.A Traditional Plan providing Life cover for 15 years by paying premiums for 11 years only.
2.Option to pay the premium in annual or monthly mode Guaranteed Money Back payouts of 15% of Sum
Assured at the end of 4th, 8th & 12th Policy year. Guaranteed Maturity benefits after 15 years – 55% of the
Sum Assured + accumulated annual bonuses along with Final Bonus.
3.SSMB is a win-win product - Customer gets guaranteed Money Back + Life Cover and Bank
earns higher commission (23.5%) on every SSMB sourced.
4.Age of entry: Min 8 yrs Max 55 yrs; Age at Maturity- M
LIFE INSURANCE COVER FOR OUR HOME LOAN
Our JV Life Insurance Co. Canara HSBC OBC Life Insurance Co. (CHOICe) has increased its
traditional product portfolio by launching the following two new products:
 Assured Nivesh” – An Endowment Plan with guaranteed returns
 “Smart Suraksha” – A pure term plan offering high cover at low premium

LIFE INSURANCE GROUP SECURE - EDUCATION LOAN (Cir: 515/2013 )

Group Secure Education Loan proposition is exclusively designed for the Education Loan
borrowers of Canara Bank. The unique selling propositions of this plan are as mentioned below;
 Reducing cover: Sum Assured reduces as per loan amortization schedule at inception of cover
 Joint Borrower coverage: Two lives – Parent and child can be covered Three lives – Both
parents and child can also be covered
 Sum Assured up to 120% of loan; Moratorium Period: Coverage will be provided during
moratorium period – with interest accumulation
 Age at Entry :12 to 64 years
 Cover Term : 1 to 15 Years (subject to maximum cover age of 69 years)
 Sum Assured: Minimum – Rs 10,000
 Maximum – Rs 50 Lac
 Premium Payment: Single premium only. Premium can be financed by the bank
 Risk Coverage: Death of the borrower
FOCUS FEE INCOME-STRATEGIES
 PCBs/VLBs need to focus more on generating fee income-LC/BG
 Focus on LC & BG (non-fund business)
 Augment Tax collection.
 Recovering arrears of lockers & minimizing Vacancies.
 New PPF and Pensioner’s accounts to grow.
 Marketing and cross-selling of all products- 4 products per client
 Involve all staff members in effective cross selling.
 Rationalize recommendation for concession in RoI & Charges
 Leakage in fee income to be plugged

SAMPOORNA KAVACH PLAN (SKP) OF CANARA HSBC OBC LIFE INSURNACE

COMPANY.
Micro Insurance Product – Sampoorna Kavach Plan for Group Members and BSBD ( No Frill
Accounts) holders of all the branches
· Sum assured Rs 50000 with effect from 07th October 2015 (478/2015)
· The premium payable by each member is Rs.100/- P.A.
· Age at entry - Minimum of 18 Yrs Maximum 59 Yrs.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 212 | P a g e
 · Maximum cover age – 60 years ( as on last birthday).
· The Scheme covers only natural death and death due to accident
Pradhan Mantri Jeevan Jyothi Bima Yojana (PMJJBY) covers the persons in the age group of 18-50
years. Branches may mobilize SKP policies from the above age group with a special focus on
customers between 50-59 years.
CANARA NISHCHINT – EK RHIN SURAKSHA YOJANA
A new Life Insurance Group Secure Scheme for Personal Loan borrowers
Ref: Cir: 227/2014
PERSONS / LOANS COVERED: Canara Consumer Loan, Canara Budget & Teachers’ Loan
borrowers are eligible to be covered under this new Group Secure Scheme.
Customers availing Personal Loans for meeting the medical expenses for own health are not
eligible for cover under this Scheme.
In case of joint loan borrowers, the primary borrower will be covered.
The Key Benefits of this Scheme are
· Single Premium only. Premium rate is age-specific. Minimum premium per member is INR 100
exclusive of taxes.
· Reducing Cover.: Sum assured at the time of death, as per the defined schedule specified at
the outset in the certificate of insurance
· Surrender Value payable in case of Closure / Pre-closure of the loan.
· Sum Assured from Rs. 10,000/- to Rs. 10,00,000/-
· The burden of loan liability is not passed on to the dependent family members and also insulates the
Bank from any loss, due to happening of any unfortunate event to the loan borrower.
· MINIMUM GROUP SIZE: 50 members at Master policy issuance stage
· AGE AT ENTRY: Minimum: 18 years as on last birthday (LBD); Maximum: 64 years as on last
birthday
· MAXIMUM COVER AGE: 69 years (as on last birthday) If (maximum cover age – age at entry
of borrower) < Loan Term, such borrower cannot be enrolled under the plan.
· Minimum Cover Term: 2 years; Maximum cover term (subject to maximum cover age being
69 years l.b.d): 10 years Cover Term = Repayment Period (subject to above limits)
Micro Insurance Product – Sampoorna Kavach Plan for Group Members and BSBD ( No Frill
Accounts) holders of all the branches
· Sum assured Rs 50000 with effect from 07th October 2015 (478/2015)
· The premium payable by each member is Rs.100/- P.A.
· Age at entry - Minimum of 18 Yrs Maximum 59 Yrs.
· Maximum cover age – 60 years ( as on last birthday).
· The Scheme covers only natural death and death due to accident
Pradhan Mantri Jeevan Jyothi Bima Yojana (PMJJBY) covers the persons in the age group of 18-50
years. Branches may mobilize SKP policies from the above age group with a special focus on
customers between 50-59 years.
CANARA NISHCHINT – EK RHIN SURAKSHA YOJANA
A new Life Insurance Group Secure Scheme for Personal Loan borrowers
Ref: Cir: 227/2014
PERSONS / LOANS COVERED: Canara Consumer Loan, Canara Budget & Teachers’ Loan
borrowers are eligible to be covered under this new Group Secure Scheme.
Customers availing Personal Loans for meeting the medical expenses for own health are not
eligible for cover under this Scheme.
In case of joint loan borrowers, the primary borrower will be covered.
The Key Benefits of this Scheme are
· Single Premium only. Premium rate is age-specific. Minimum premium per member is INR 100
exclusive of taxes.
· Reducing Cover.: Sum assured at the time of death, as per the defined schedule specified at
the outset in the certificate of insurance
· Surrender Value payable in case of Closure / Pre-closure of the loan.
· Sum Assured from Rs. 10,000/- to Rs. 10,00,000/-
· The burden of loan liability is not passed on to the dependent family members and also insulates the
Bank from any loss, due to happening of any unfortunate event to the loan borrower.
· MINIMUM GROUP SIZE: 50 members at Master policy issuance stage
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 213 | P a g e
 · AGE AT ENTRY: Minimum: 18 years as on last birthday (LBD); Maximum: 64 years as on last
birthday
· MAXIMUM COVER AGE: 69 years (as on last birthday) If (maximum cover age – age at entry
of borrower) < Loan Term, such borrower cannot be enrolled under the plan.
· Minimum Cover Term: 2 years; Maximum cover term (subject to maximum cover age being
69 years l.b.d): 10 years Cover Term = Repayment Period (subject to above limits)

HEALTH INSURANCE
CANARA MEDICLAIM
Group Mediclaim Floater cum Personal Accident Policy issued by United India Insurance Company
Limited
specifically designed for the accountholders
Features Of The · To meet the hospitalisation expenses; Built-in Personal Accident Cover; policy
Schme would be a floater policy ; The premium paid towards Canara Mediclaim is eli
ible for relief under Section 80D of Income Tax Act 1961.
· Any one member or all the members put together can avail
Floater Policy hospitalization benefits during the policy period up to the sum
Types of Plans insured
· Plan A (1+3) covering four persons in a single policy viz. the account holder,
the
spouse and two dependent children.
· Plan B (1+5) the cover is extended to dependent parents or parents in law in
addition to account holder, spouse and two dependent children.
· Plan C (1+3) exclusively for Customers aged up to 35 yrs - the account
Persons Covered · holder,
Persons to be covered should be in the age group of 5 to 80 years.
· Children in the age of above 3 months to below 5 years can also be
covered provided one or both parents are covered concurrently.
Relaxations Life long renewals permitted.
Requirement Of · No medical check up is required, if all the family members are
Medical Check-Up aged below 66 yrs at the time of availing the policy.
Sum Insured · Minimum Rs.1,00,000/- (increased from Rs.50,000 earlier) to
Maximum Rs.10 Lacs (Increased from Rs.5,00,000/- earlier).
· Dependent Male child covered upto 26 years (if he is a bona fide fulltime
student & non earning) as against earlier limit of 21 years. Female child is
covered till Marriage or employment whichever is earlier ( age no restriction)
· Ambulance charges increased to Rs. 2000/- as against Rs. 1000/- earlier.
· The customer can avail benefit of cashless services in networked hospitals of
Third Party Administrator (TPA) anywhere in India.

Expenses Covered · The Policy covers certain specified expenses of hospitalization

on
Cashless Services · account of illness/diseases
The customer contracted
can avail benefit or injury sustained.
of cashless services in networked
hospitals of Third Party Administrator (TPA) anywhere in India
· The customer can also take treatment in hospital/nursing home of
his/her own choice and claim reimbursement from TPA.
· Cash-less medical treatment and helpful during emergency
Pre- · Pre-existing diseases would be covered from the fourth year
Existing onwards
Diseases
Premium Details · subject to certain conditions.
Premium based on the sum assured ranging Minimum Rs.1,00,000/
(increased from Rs.50,000 earlier) to Maximum Rs.10 Lacs (Increased from
Rs.5,00,000/- earlier).
Commission The commission earned is Non- interest Income to the Bank
Reference HO Cir: 277/2015

CANARA BANK GROUP HEALTH INSURANCE PRODUCT ‘EASY HEALTH’ OF

APOLLO MUNICH HEALTH INSURANCE (AMHI)
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 214 | P a g e
· Product description: This product is a group health insurance offering to the customers of Canara Bank. It
offers indemnity based coverage for In-patient hospitalization as explained below, with varied plan options like
critical illness upto Rs.50,000/- & personal accident cover upto Rs.100,000/-
· Target group: Entry Age from 91 days to 69years.( 488/2014)
· Distribution: Group health insurance with optional critical illness & personal accident benefit for
our customers
· Duration: The proposed duration of the cover will be 12 months for every insured member in the group
(non co-terminus policy)
· Sum Insured: Health Insurance –Sum insured of Rs.50,000/-, Rs.100,000/- and Rs.200,000/- to the
o Individual
o Family including self + spouse + up to 4 children (floater policy)
o Either set of self or spouse‟s parents in a single policy (floater policy)
· Benefits –
o Hospitalization Insurance Rs.50,000/-, Rs.100,000/- and Rs.200,000/
o In-Patient Treatment Upto Sum insured
o Pre/Post-Hospitalization 60/90days respectively
o Day Care Procedures Coverage for 140 enlisted
Day Care Procedure Optional benefits: Critical illness
insurance
o Critical Illness ( Indemnity based) Additional increase of Rs 50,000 on Sum Insured
Personal Accident cover: The personal accident cover for Rs.100,000/- for every insured member in
the policy
Additional benefits under health insurance:
o Additional coverage for organ transplant upto hospitalization sum insured
o Emergency ambulance upto Rs.2000/- per hospitalization
o Domiciliary expenses upto hospitalization sum insured
o Daily cash of Rs.500/- for twin sharing accommodation / for accompanying insured child,
o Annual health checkup upto Rs.1000/- (For SI of Rs.50,000), Rs.1500/- (For SI of Rs.1 lac)
and Rs.2000/- (For SI of Rs.2lacs)
o Ayush treatment (like Unani, Ayurveda & HomeopathY etc.)
upto 5% of hospitalization sum insured Product Features
o This policy covers persons in the age group 91 days to 69 years. The maximum entry age is restricted
upto 69 years with no maximum cover ceasing age.
o Dependent children between 91 days and 25 years can be insured (Children between 91 days to 5
years can be covered only if either parent is covered under the policy)
o In case of a family opting for individual policies, the sum insured for dependents shall not
be more than that of the primary insured.
o Product offered on voluntary basis.
Reference: Cir- 521/2013, 315/2014, 488/2014

IBA MEDICAL INSURANCE SCHEME FOR THE RETIRED OFFICERS/EMPLOYEES

443 /2015
· Aimed to cover the medical expenses of the retirees and his/her dependant spouse only.
· One time option shall be extended to the retirees. Those retirees who do not opt now,
would not be allowed to join later.
· Identity Card is proposed to be issued by United India’s Third Party Administrator

Cadre Sum Insured Premium Service Tax @ 14% Total Annual

rounded to next Premium Including
rupee service Tax
Workmen Rs.3.00 Lakhs Rs.4930/- Rs. 691/- Rs.5621/-

Officers Rs.4.00 Lakhs s.6573/- Rs.921/- Rs.7494/-

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 215 | P a g e
 14.LATEST BANKING CONCEPT
UNIVERSAL BANKING
Universal banking (Khan Committee) means allowing undertaking all kinds of activity of
banking or development financing activity, subject to compliance of Statutory and other
requirements prescribed by RBI, Govt. and related legal Acts. 'Activities include -low risk
activities like. acceptance of deposits, investing in securities, medium risk activities like
granting of loans, high risk activities like credit cards, forex and insurance, project financing.
NARROW BANKING
Banking in low risk products such as collecting low cost deposits, lending to low risk loans,
investment in govt. securities. (recommended by SS Tarapore CoMmittee)
CROSS SELLING
Cross selling is a marketing tool which means to make effort to sell to customers, more than one
product. It leads to per customer (a) reduction in operational cost and (b) increase in business
and profits.
SECURITISATION
Securitisation is the process by which the selected pool of loans of a Bank is sold to a trust called
Special Purpose Vehicle. (say SBI sells a part of its housing finance loans to the SPV). The
SPV•in turn, issues marketable paper securities (called Pass Through Certificates and similar to
debentures) against the backing of such assets and sells the same to prospective investors.
.
FACTORING.
Factoring is an arrangement under which a factoring company purChases and administers the
doMestic receivables of short term period of a firm after purchasing the receivables from the
seller of goods. The responsibility to recover is that of the factor which recovers discount and
collection charges from the seller.
FORFAITING
It is on the pattern of factoring and deals with long term and medium export receivables (deferred
payment- exports) while factoring deals with short.term receivables.

WAYS & MEANS ADVANCES (WMA)

It is temporary overdraft that RBI allows to Govt. to cover the mismatch between Govt. receipt
and payment. For Central Govt. it is for max. 10 days and for State govt. for 14 days. interest is
Repo Rate.
LIQUIDITY ADJUSTMENT FACILITY .,
It is short term loan that RBI allows to a commercial bank to cover the short term liquidity
problem. It is through repo-reverse repo mechanism at Repo rate (i.e. RBI purchases govt.
securities from the bank with the condition of re-purchase by the bank at the end of loan period).
MARGINAL STANDING FACILITY
It is overnight loan that RBI allows to a commercial bank against collateral of govt. securities.
Max amount is restricted to 2% of net demand and time liabilities. Rate of Interest = Repo.rate +
1%
REPO / REVERSE REPO
Repo : When RBI purchase govt. securities from bank to inject liquidity. It increases the liquidity
with banks. It is done at Repo Rate.
Reverse Repo : When RBI sells govt. securities to bank to absorb liquidity. It reduces liquidity
with banks and done at reverse Repo Rate.
FINANCIAL INCLUSION
Financial inclusion means the delivery of banking services at an affordable cost to the vast
sections of disadvantaged and low income groups. Opening of no-frill accounts or granting loans
under govt. sponsored schemes etc. is part of the financial inclusion. Financial inclusion can be
expanded through state-driven intervention (by way of statutory enactments) and through
voluntary effort of banking community itself for evolving various strategies to bring within the
ambit of the banking sector, the large strata of society.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 216 | P a g e
CERTIFICATE OF DEPOSIT & COMMERCIAL PAPER
Certificate of Deposit. Commercial Paper
Who can Scheduled commercial banks (except -Financial Institutions,Primarydealers &
issue .RRBs), and All India Financial Institutions reputed companies
within their 'Umbrella limit'.
CRR!SLR Applicable on the issue price in case of Not applicable .
Investors banks
' Individuals (other than minors),corporations, individuals -
(other than . minors),
companies, trusts, .funds, associations etc corporations, companies, trusts,
funds,
Maturity Min: 7 daysMax : 12 Months'. (in case of Fls Min: 7 days Max : 12 Months
minimum 1 year and maximum 3 years). .
Amount Min: Rs.1 lac, beyond which in multiple of Min: Rs.5 lac, beyond which in multiple
"Rs.1lac ' of Rs.5 lac

Issue of commercial paper by a company : 4 conditions are to be satisfied (1) Net worth Rs.4 cr,
sanctioned working capital, their loan accounts in standard category and credit rating of P2 from
CRISIL or equivalent from others.
Features Common to CD & CP
Premature cancellation not allowed
Transfer: Endorsement & delivery. Any time
Instrument: Usance Promissory note. Can be issued in Dematerialisation form only
Loan : No loan can be given on security of these documents
 if payment day is holiday, paid' on next preceding business day
 Issued at a discount to face value

PROMPT CORRECTIVE ACTION

It relates to taking corrective action promptly, where a bank faces weakness in respect of CAR,
net NPA o rofits. The action becomes necessary when the following situation arises (called
Trigger Points)
Parameter _
Capital Adequacy Ratio Trigger level
less than 9%
Non-performing assets Net NPAs over 10%
Return on assets Below 0.25%
DIVIDEND PAYMENT PARAMETERS
Banks can declare dividend without RBI permission, if they fulfill the undernoted criteria.
Normal cases Special Cases
9% for the year
Capital adequacy 9% for the year for which dividend
for which
to be paid & previous 2 yrs
dividend to be paid
,
Net NPAs Less than-7% Less than 5% -
There is ceiling on dividend payout in the form of a ratio which can be 40%. It can be paid from current year's
profits only. The ratio is worked out as Dividend payout ratio = Amount of dividend / amount of profits after
provisions x 100).
INSURANCE BUSINESS
Insurance business can be (a)'Bancassurance (selling policies of other companies for commission as
corporals agent — called without risk) (b) underwriting-(risk based). Licence from IRDA required for both.
Underwriting business: (with risk insurance business). Business can be. done through a separate
subsidiary company as a joint venture. Maximum investment of the bank can be 50% of the capital
of the company. Permission to be obtained from RBI, if following Parameters are complied with.
Net worth 500 cr
Profits ' . 3 years
Net NPAs Reasonable
Capital adequacy ratio 10%

Performance of subsidiaries Satisfactory .

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 217 | P a g e
 Indian Banks Forei n Banks .
C Capital adequacy ratio C Capital adequacy ratio
-
A. Asset quality A Asset quality -
M Management Effectiveness C Compliance
E Earning (i.e. profitability) . S System and controls
L Liquidity (asset-liability management) -
S System and controls

SMALL BANK & PAYMENT BANKS

Small Finance Banks in Private Sector Payment Banks

Objective : Furtherance of Financial inclusion. Objective : Furtherance of Financial inclusion.
Can accept deposit and give loans. Can accept only demand deposits and cannot
Promoters : NBFC, Companies, Societies, LAB, give loans.
MFI, Individual / professionals with 10 years' Promoters : PPI issuers, NBFC, Individual /
experience. professionals, Mobile phone co.
Capital : Min Rs.100. cr (Promoters min 40%, Capital : Min Rs.100 cr (Promoters min 40% for first
to reduced to 26% -in 12 years) 5 years). Leverage ratio : 3% (i.e. (Vs liabilities can
Prudent norms : As applicable to commercial be 33.33 times of net worth)
banks including CRR / SLR. Priority sector : 75% of demand deposits to
Priority sector : 75% of ANBC. 50% of total loans be invested in Govt. Securities (max one year
to including individual loans up to Rs.25 lac. maturity). Max 25% can be deposited M
commercial banks.

BANKING SUPERVISION & CAMLES RATING CRITERIA

Banking supervision is carried by RBI on on--site basis (as per Sec 35 of B R Act) and off-site
supervision (through •DSB returns). Based on that, rating of bank is carried by RBI on CAMELS
criteria. The rating parameters for Indian Banks and Foreign Banks are given below:

ASSET - LIABILITY MANAGEMENT IN BANKS

It has been implemented wef April 01, 1999.

What is ALM : ALM is the management of structure of balance sheet (liabilities and assets) in such a
way that the net earning from interest is maximised within the overall risk-preference (present and
future) of the institutions.
Maturity buckets are different time intervals (10 for the time being, namely next day, 2-7 days, 8-14
days, 15- 28, 29-90, 91-180, 18'1-365 days, 1-3 years, 3-5 and above 5 years), in which value of an
asset or liability is placed desending upon its residual maturity
Mismatch position : When in a particular maturity bucket, the amount of maturing liabilities or assets does
not match, such position is called a mismatch position, which creates liquidity surplus or liquidity crunch
position and depending upon the interest rate movement, such. situation may turnout to be risky for the
bank.
Ceiling on mismatch position : Mismatches for cash flows for next day to 15-28 days' buckets to be
kept to minimum (not to exceed 5% for next day, 10% for 2-7 days, 15% for 8-14 days and 20% for
15-28 days, each of cash outflows for those buckets).
Role of ALCO : Asset-Liability Committee is the top most committee to oversee implementation of ALM
system, to be headed by CMD or ED. ALCO would consider product pricing for both deposits and advances,
the desired maturity profile of the incremental assets and liabilities in addition to monitoring the risk levels
of the bank. It will have to articulate current interest rates view of the bank and base its decisions for
future business strategy on this view.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 218 | P a g e
Call Money Money lent for one day
Notice Money Money lent for a period of 2-14 days
Term Money Money lend for 15 days or more in Inter-bank market
Held till maturity Govt. securities which are not meant for sale and shall be kept till maturity by the
Held for trading Govt. securities acquired by the banks with the intention to trade by taking
advantage of the short-term price/ interest rate movements.
Available for sale Govt. securities which do not fall within the above two categories i.e. HTM or HFT.
Yield to maturity Expected rate of return on a security during the period, it is held by an
investor which may include capital gains and losses also.
Coupon Rate Specified interest rate on a fixed maturity security, fixed at the time of issue.
Gilt Edged security Government security.
Dated securities Govt. security instruments which have tenure over one year.
Prudential limits For call Borrowing : On a fortnightly basis, maximum 100% of capital fund of
money latest audited balance sheet. It can go up to 125% on any particular day.
Lending: On a fortnightly basis, maximum 25% of capital fund of latest
audited balance sheet. It can go up to 50% on any particular day.
Inter-bank liability Max 200% of its net-worth as on 31st March of the previous year. Banks with
ceilings CRAR is at least 25% more than the minimum CRAR (9%) i.e. 11.25% up to
300% of the net worth for IBL.

TERMS RELATING TO MONEY MARKET FINANCIAL PRODUCTS

Derivatives: A derivative is a financial contract that derives its value from another financial
product/commodity (say spot rate) called underlying (that may be a stock, stock index, a foreign
currency, a commodity). Forward contract in forex, a simple form of a derivative.
Option : It is contract that provides a right but does not impose any obligation to buy or sell a financial
instrument, say a share or security. It can be exercised by the owner. Options offer the buyers, profits
from favourable movement of prices say of shares or foreign exchanqe.
Variants of option: There are two variants of options i.e. European (where the holder can exercise his
right on the expiry date) and American (where the holder can exercise the right, anytime between
Call option : Owner (buyer), has the right to purchase and the seller has the obligation to sell, a specified
no. of instruments(say shares) at a specified rate durin thetime frior to expi date.
Put Option : Owner or the buyer has the right to sell and the seller has the obligation to buy during
Futures: The futures are the contracts between sellers and buyers under which the sellers (termed
'short') have to deliver, a pre-fixed quantity, at a pre-fixed time in future, at a pre-fixed price, to the
buyers (known as long'). The main features of a futures contract are that these are traded in organised
exchanges, regulated by institutions such as SEBI, they need only margin payment on a daily basis.
Futures contract are made primarily for hedging, speculation, price determination and allocation of
resources.
Forwards: The forward on the other hand is a contract that is traded off-the-stock exchange, is self
regulatory and has certain flexibility unlike future which are traded at stock exchange only, do not
have flexibility of quantity and quality of commodity to be delivered and these are regulated by SEBI,
RISK TERMS
Credit Risk Risk on account of possible default by the borrower in meeting his commitments
Market Risk Risk on account of trading in securities
Legal Risk Risk on account of deficiency in loan documentation
Liquidity risk Risk of inability of a bank to meet its liabilities due to mismatch in inflows frog-6
assets and liabilities
Settlement risk Risk of default by a bank in meeting its obligations due to its capacity to repay
Interest rate risk Risk due to changes in interest rates leading to effect on profit and loss of the
Operational risk bankon account of failure of internal processes, procedures etc.
Risk
Forex Risk Risk on account of fluctuation in forex rates
Systemic Risk Risk to a system on account of failure of other related systems.
Reputation risk Risk to reputation of a bank on account of engaging services of 3rd parties for
certain banking jobs.

RIGHT TO INFORMATION ACT

 Information can be obtained by Indian Citizen only from any public authority without giving any
reason.
 Information is available with Public Information Officer, appointed by each organization for that

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 219 | P a g e
 purpose.
 Time for providing information : 30 days; If information pertains to life and liberty, the period is
48 hours
 Fine for delay in providing information: Per day Rs.250 and total Maximum fine Rs.25000
 Record preservation time: 5 to 8 years as fixed by Central Govt.

IMPORTANT TERMINOLOGY

Important terms and ratios used in

Ratio of wage bill to total expenses = PPE / Total expenses
Ratio of wage bill to total income = PPE / Total income
Ratio of burden to total assets = (Operating expenses - Other income) / Total assets
Ratio of burden to interest income = (Operating expenses - Other income) / Interest Income
Ratio of operating profits to total assets = Operating profit / Total assets
Return on assets for a bank group = weighted average of return on assets of individual banks in the
group, weights being the proportion of total assets of the bank as percentage to total assets of all banks
in the corresponding bank group
Return on Equity = Net Profit / (Capital + Reserves and Surplus)
Cost of Deposits = IPD / Deposits
Cost of Borrowings 2-- IPB / Borrowings
Cost of Funds = (IPD + IPB) / (Deposits + Borrowings)
Return on Advances = IEA / Advances
Return on Investments = IEI / investments
Return on Advances adjusted to Cost of Funds = Return on Advances — Cost of Funds
Return on Investment adjusted to Cost of Funds = Return on Investments — Cost of Funds
Net interest margin is defined as the total interest earned less total interest paid
Intermediation cost is defined as total operating expenses
Operating profit is defined as total earnings less total expenses, excluding provisions and contingencies,
and Burden is defined as the total non-interest expenses less total non-interest income
Whenever appropriate, denominators in the ratios use averages of "current year" and "previous year". For
instance, ratio of net interest margin to total assets uses denominator as average total assets for the y
Donations by banks
Profit making banks max 1% of published net profits of previous year and loss making banks max Rs.5
lac.
Casino Banking
A p r a c ti c e o f c o m m e r c i al ba n k s e n g agi n g i n u n d u l y s p e c u l a ti v e o r r i s k y fi n a n ci al
a c ti vi ti e s t o r e c o r d h i gh p r o fi t s .

Profit Planning Terminology in a Nutshell

 “Interest Spread” & “Net Interest Income” are one and the same.
 The difference between ‘non-interest expenditure’ and non-interest income’ is defined as
“Burden”.
 “Interest Spread’ less ‘Burden’ determines “ Operating Profit’ “
 Profit vs. Profitability: While profit represents an absolute figure, profitability, measured by
a ratio, represents the operational efficiency. As opposed to absolute profit volumes,
profitability is a more meaningful yardstick of operational efficiency as it is size-neutral.
 Return on Assets (RoA) : RoA is the ratio of Net profit to total assets. This is a standard
measure of profitability with 1% deemed as the international benchmark.
 Net Interest Margin (NIM) : NIM is the ratio of net interest income (Total Interest Income
minus Total Interest Expenditure) to average earning assets.
 Return on Capital (ROC): ROC is the ratio of net profit to share capital. It indicates the return
on paid up capital.
 Return on Net worth , also known as Return on Equity (ROE): Ratio of net profit to average
net worth (share capital, plus reserves minus intangible assets). It indicates the return on
equity capital.
 Book Value: Net worth divided by number of shares. Market price of share generally
factors Book Value.
 Earning Per Share (EPS) & Price earning Ratio (P/E ratio) : EPS is the ratio of Net profit to

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 number of shares.
 Price – Earning is the ratio of market price of a share to earning per share. EPS and P/E ratios
indicate the ability of the bank to access to the capital market and the appetite of the bank’s
scrip in the market.
 Capital to Risk-weight Assets Ratio (CRAR): Total capital, consisting of Tier-I & Tier-II
capital, as a ratio of risk-weighted assets. It indicates the soundness and risk bearing ability of a
bank.
 Yield on Advances: Interest income on advances divided by average advances indicates
average yield on advances.
 Yield on Investments: Interest & dividend income on investment divided by average
investments indicate yield on investments..
 Yield on Working Funds: Total interest income divided by average working funds, consisting
of interest earning and non-interest earning assets.
 Cost of Deposits: Interest paid on deposits divided by the average deposits, consisting of
Current, Savings and Term deposits. This is the comparable benchmark for liabilities
management.
 Cost of Borrowings: Interest paid on borrowings, including borrowing for Tier-II capital,
divided by average borrowings.
 Cost of Interest Bearing Liabilities: Interest paid on deposits and borrowings divided by
average interest bearing liabilities (deposits and borrowings, including Tier-II bonds).
 Cost of Working Funds: Total interest expenditure divided by average working funds,
consisting of interest bearing and non-interest bearing liabilities (total of liability side of balance
sheet).
 Spread: Difference between the Yield on Working Funds and Cost of Working Funds represents
Spread.
 Intermediation Ratio: It measures the ratio of operating expenditure to total assets. As per
international criterion, this ratio should be less than 1 per cent.

 Cost- Income (Efficiency) Ratio: Non-interest expenditure divided by net total income (total
income minus interest expenses). It signifies movement in operating cost relative to income.
Global benchmark is 40 per cent.
 Burden Ratio: Ratio of non-interest income to non-interest expenditure. As an efficiency
criterion, non-interest income should be able to cover the non-interest expenditure.
 A recent cost benefit study on ATMs has revealed that a minimum of 150 transactions per day is
required on an ATM to make it BREAK-EVEN.

 Global Benchmarks in Profitability:

Criterion Parameter International

Solvency Ratio Capital Adequacy Minimum 8%
Efficiency of Assets Use Return on Assets 1%
Net NPA Ratio Net NPA Ratio to Net Advances Less than 1%
Intermediation Efficiency Operating Cost to Average Working Less than 1%
Burden Ratio Funds Income to Operating Expenses
Other Minimum 100%
Cost- Income Ratio Operating Cost to Net Income Less than 40%

 Benchmark Prime Lending Rate: RBI asked banks to declare their own Benchmark Prime
Lending Rate (BPLR), i.e the minimum interest rate which the bank can charge for its zero risk
customers.
 While deciding the BPLR, Banks should take into account following factors: Actual cost of Funds,
Provision for NPAs, Other Regulatory provisions, Profit Margin.

INFLATION & RELATED TERMS

1. Inflation: A situation of a steady and sustained rise in general prices is usually known as
inflation. Inflation is a state in which the value of money is falling i.e. prices are rising.
2. Cost-push Inflation: It arises due to an increase in production cost. Such type of inflation is
caused by three factors: (i) an increase in wages, (ii) an increase in the profit margin and (iii)
imposition of heavy taxation.

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3. Demand- push Inflation: It arises as a result of strong consumer demand. When many
individuals are trying to purchase the same good, the price will inevitably increase. When this
happens across the entire economy for all goods, it is known as demand-pull inflation
4. Deflation: Deflation is the reverse case of inflation. Deflation is that state of falling prices which
occurs at that time when the output of goods and services increases more rapidly than the volume
of money in the economy. In the deflation the general price level falls and the value of money
rises.
5. Disinflation: A fall in the rate of inflation. This means a slower increase in prices but not a fall in
prices
6. Recession: A period of slow or negative economic growth, usually accompanied by rising
unemployment.
7. Stagnation: A prolonged recession, but not as severe as a depression.
8. Disinflation: A fall in the rate of inflation. This means a slower increase in prices but not a fall in
prices.
9. Depression: A prolonged recession in economic activity. The textbook definition of a recession is
two consecutive quarters of declining outpur. A depression is an even deeper and more prolonged
slump.
Terms used in Budget
10. Ad- Valorem Duties: duties that are established as a certain percentage of the price of the
product.
11. Custom Duties: levies that are incurred from the goods exported from or imported to the
country.
12. Excise Duties: Duty levied on goods manufactured within the country.
13. Direct Taxes: taxes that are implied directly on the individuals. Corporate tax and Income tax
are direct taxes.
14. Indirect Taxes: Tax levied on manufacture, consumption, etc which are collected by the provider
of service or manufacturer of goods. Examples are Excise Duty, Custom Duty, VAT, Service Tax.
15. Progressive Tax: a tax where the wealthy have to give more income tax as compared to the
poor.
16. Gross Domestic Product (GDP): It is the money value of all final goods and services produced
in the domestic territory of country in a year.
17. Fiscal Measures: Measures to correct excess /deficient demand through budget proposals of
government are called fiscal measures. These include tax changes, increase /reduction in
government expenditure etc.
18. Real exchange rate: An exchange rate that has been adjusted to take account of any difference
in the rate of inflation in the two countries whose currency is being exchanged.
19. Fiscal deficit: is the gap between the government's total spending and the sum of its revenue
receipts and non-debt capital receipts. It represents the total amount of borrowed funds required
by the government to meet its expenditure.
20. Primary Deficit: Fiscal Deficit minus Interest on Borrowings.
21. Budget Deficit: difference between the estimated public expenditure and public revenue. The
government meets this deficit by way of printing net currency or by borrowing.
22. Revenue Deficit: difference between Revenue Expenditure and Revenue Receipts.
23. Current Account Deficit: when a country's total imports of goods, services and transfers is
greater than the country's total export of goods, services and transfers.
CAPITAL ADEQUACY RATIO / CAR / CRAR
The objective is to strengthen the capital base of banks with reference to their risk weighted
assets, expressed
as a ratio as under: Capital Fund / Risk Weighted Assets x 100

Minimum CAR as per Basel II recommendations 08 %

Minimum CAR in India as per RBI guidelines 09%

Out of this 6% should be Tier I by 31.3.2010, if already not so. Tier II cannot be more than 50% of
the total capital as per Basel 1
Capital fund
Tier 1 Tier II
 paid-up capital  Un-disclosed reserves and
 statutory reserves preference shares:
 other disclosed free reserves  Revaluation Reserves (at a discount of 55
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  capital reserves representing surplus arising while determining their value for inclusion in
sale proceeds of assets. capital)
 Investment Fluctuation Reserve.  General Provisions and Loss
 Innovative Perpetual Debt Instruments maximum of 1.25% of weighted risk
 Perpetual Non-Cumulative Preference shares.  Subordinated debt (long term unsecured loans
(PNCPS)  Hybrid debt capital Instruments' (say bonds):
Both riot to be more than 40% of Tier I (1PDI  Debt capital instruments min maturity 15
max 15%). There is no maturity period. There  Redeemable cumulative preference shares.
option after 10 years.  Redeemable non-cumulative preference
.>Minus shares.
Perpetual cumulative preference shares.
 equity investments in subsidiaries,
 intangible assets, and
 losses in the current period and those brought
forward from previous periods

Risk weighted assets — Fund Based

Risk weighted assets mean fund based assets such as cash, loans, investments and other assets.
Degrees of credit risk expressed as percentage weights have been assigned by RBI to each such
assets.

Cash, balance with RBI, 00%

Balances with other banks with CRAR of 9% & above 20%a

Secured loans to Staff 2 0%

MembersOther loans to 75%
staff members
Housing Loan up to Rs.75 lac to individual secured by 50%
Mortgage Housing Loan more than Rs.75 lac to individual 75%
secured by Mortgage
Forex and gold open position 1 0 0%
Exposure to Central/State Govt 0%
Central Govt guaranteed advance 0%
State Govt guaranteed advances 20%
Loans to PSUs (not guaranteed by Govt) 1 0 0%
Claims on unrated corporates 1 0 0%
Exposure to DICGC/CGFT 0%
Exposure to ECGC 20%
Loans against FDR, LIC policy, NSCs with margin 0%
Education loan (under Basel I — 100%) But under Basel-II 75%
Loans against gold/silver jewellery up to Rs.1 lac 50%
Consumer credit / credit cards/Personal Loan 125°/%
Exposure to capital market 1 2 5%

Commercial real estate 100%

Venture Capital invstmt as part of Capital market exposure 150%
Loans to non-deposit taking NBFCs for on-lending 1 0 0%
Retail Loan & Loan to SME (Retail Loan means limits up to Rs 5 crore and sale 75%
in
FY previous
less than Rs 50 crore) ....

NPA if specific provision is Less than 20% 1 5 0%

If specific provision is 20% and above but less than 50% 100 %
If specific provision is 50% and above 150%
Bi ll s pu rc h a s ed u n d e r L C i s su ed b y an o th e r 20%
ban k

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 Risk Weights for Important Assets

BASEL II : Three Pillars

1st Pillar — Minimum Capital Standard (to be complied with by bank)

2nd Pillar — Supervisory Review (to be carried by RBI based on
1CAAP &SREP) 3rd Pillar — Market Discipline.
Aooroaches for risk calculation
Standard Approach, Internalrating Based approach (comprise foundation approach &
Credit Risk advance approac

Market Risk Standard Approach (comprising maturity method & duration method), Internal risk based
approach
Operational Basic Indicator Approach, Standard Approach, Advance Measurement Approach
Risk

Immediate implementation. Other approaches to be implemented later on.

BASEL III
Basel III: A Global Regulatory Framework for more Resilient Banks & Banking Systems
issued in Dec 2010, is comprehensive reform package of Basel Committee on Banking
Supervision (BCBS)
Objective - (a) improve ability to absorb shocks from financial & economic stress (b) to reduce
risk of spillover frorrit financial sector to real economy.
3 Pillars
Framework based on 3 pillars. Pillar-1 : Minimum capital standards, Pillar : 2 Supervisory
review and Pillar:3 Market discipline.
Pillar-1 Minimum Capital Standards
The total regulatory capital consist of the following :
(i) Tier 1 Capital (going-concern capital) comprising -
(a) Common Equity Tier 1 and
(b) Additional Tier 1
(ii) Tier 2 Capital (gone-concern capital).
In addition, the banks will also have to build capital conservation buffer (CCB), comprised of common equity.
Basel III implementation in India
It began w.e.f. April 1, 2013. It will be fully implemented by 31.03.2019. Certain provisions of
Basel II will continue tilt 31.03.2017 (parallel run).
Capital Ratios in Basel III
1. Common equity Tier I capital ratio = Common Equity Tier I Capital / RWA for (Credit risk
+ Market risk Operational risk)
2. Tier I capital ratio = Tier I Capital / RWA for (Credit risk + Market risk + Operational risk)
3. Total capital ratio (CRAB) = Eligible Total Capital / RWA for (Credit risk + Market risk + Operational
risk)
Overall capital (% to Risk Weighted assets) 6 Capital conservation buffer (CCB)
1. Minimum Common Equity Tier 1 (CETI) 5 . 5 (comprised of Common Equity) 2.5
ratio 1.5 7 Minimum CET1 ratio + CCB (1+6) 8.0
2. Additional Tier 1 Capital ratio 7.0 8 Minimum Total Capital Ratio plus CCB [5+6] 11.5
3 Minimum Tier 1 capital ratio [1+2] 2.0 (Ratios are w.r.t. RWA for credit risk +
4 Tier 2 capital ratio 9.0 market risk -1- operational risk)
5 Minimum Total Capital Ratio (MTC)
[3+4)

LATEST FINANCIAL NEWS: 2015-16

 The bank which is to launch a loan product exclusively for Start-ups in the country-Canara Bank.
 The Interest Subvention Scheme for exports has been renamed as- Interest-Equalisation Scheme.
 The New exchange, which will be launched by BSE for Corporate Social Responsibility- Samman.
 The Committee which is reviewing the PPP Model of Infrastructure Development- Vijay Kelkar
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 Committee.
 Seventh Pay Commission whose report submitted to the government, was headed by- Justice AK
Mathur.
 The Exchange on which the first Indian Fund Income Exchange Traded Fund is listed- London
Stock Exchange.
 Chairman of new Panel to simplify Income Tax Act-Justice RV Easwar.
 The Bank which disbursed the highest amount as overdraft (Rs.27.79 Crore) under PMJDY- Punjab
National Bank.
 Former deputy governor of RBI has been appointed Executive Director of IMF-Subir Gokaran.
 Committee on Bankruptcy Law is headed by- T. K. Viswanathan.
 The Bank on which RBI has imposed a penalty of Rs.1 Crore for violation of KYC norms- Dhanlaxmi Bank.
 The Institute which plans “e-hearing facility” for disciplinary cases- CA Institute.
 The First Indian Entity to issue Green Bond- Yes Bank.
 Accessible India Campaign has been inaugurated by the Union FM with the launch of a mobile-based app
and a web portal- Sugamya Bharat.
 The temple which is to deposit 160 Kg of gold with banks to start pick up of Gold Monetization Scheme-
Siddhivinaik Temple.
 As per Global Financial Integrity research, the country which has been ranked 4th biggest source of black
money with $51 billion annually on average-India.
 Government has appointed a Judicial Panel on “One Rank One Pension” which is to be headed by- Justice
L. Narasmha Reddy (Retd. Chief Justice of Patna High Court).
 A complete Action Plan which will be unveiled by the Centre on January 16-Start-up India, Stand -up India.
 This is the First time that a Bank is offering railway tickets for sale from its website and that too for
customers of all banks- ICICI Bank.
 RBI Panel, which made its recommendations on “Financial Inclusion”, had been headed by- Deepak
Mohanty.
 The Item on which no subsidy will be available from January 1, 2016 to those persons whose
taxable income exceeds Rs.10 Lakh- LPG.
 The investors, who will be able from January 1, 2016 to invest online in direct plans of Mutual Funds- Retail
Investors.
 Former Defence Secretary RK Mathur has been sworn in as- Chief Information Officer.
 Mudra Ltd. has been converted toMudra Small Industries Bank of India.
 Amitabh Kant has been appointed as CEO of- NITI Aayog.
 NSCs which have been discontinued by the government- 10-year NSCs.
 The Bank which is first to launch “Fund Transfer Via Missed Call Facility” – Federal Bank.
 The Panel, set up in a bid to give a boost to investments in Start-upsNarayana Murthy Panel.
 The Regulatory Authority which has operationalised the Central Fraud Registry with effect from
January 20, 2016- RBI.
 The Bank which has received “MSME Banking Excellence Awards 2015” for Best Performance in
MUDRA Loan- Bank of India.
World Bank maintains 7.5% GDP growth forecast for India in FY16: The World Bank has
maintained its growth forecast for India at 7.5% for 2015-16, but marginally lowered the projections
for 2016-17 and 2017-18 to 7.8% and 7.9%, respectively. The projection is, however, more
optimistic than by other agencies such as the International Monetary Fund, which has pegged India's
GDP (gross domestic product) growth at 7.3% this fiscal.
Jan Dhan A/Cs gain currency with 20 lakh daily transactions: The daily transactions have
crossed 20 lakh as indicated by the card usage with the average transaction size being Rs. 2,000.
The total number of accounts opened under PMDJY stood at 18.96 crore as on October 21, with a
total balance of Rs. 25,899 crore. The operational accounts with balance constitute 62 per cent of
the total. The top banks in this regard are State Bank of India, United Bank of India, Oriental Bank
of Commerce, Bank of Baroda and UCO Bank. The PMDJY, the biggest financial-inclusion drive in the
world, was launched on August 15, 2014, with a target to provide universal access to banking
facilities.
External debt surges by $8.5 billion in April-June: India's external debt increased by $8.5 billion
in the April-June period to $482.9 billion as at June-end 2015 due to higher commercial borrowings
and NRI deposits.
Deposit insurance: DICGC Committee recommends Differential Premium for Banks in
India: In India, specified deposits of commercial banks, Regional Rural Banks (RRBS), Local Area
Banks (LABs) and co-operative banks are covered under deposit insurance by the Deposit
Insurance and Credit Guarantee Corporation (DICGC). The premium is being charged at a flat rate
of 10 paisa per Rs 100 per annum. The flat-rate premium system has been viewed as being unfair,

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 as 'low-risk' banks are required to pay the same premium as the 'higher-risk' ones. With no inbuilt
incentive for 'higher risk' banks to improve their risk profile, a flat rate system would accentuate
the moral hazard problem. Moral hazard implies that the parties to the deposit insurance, that is, a
bank and its insured depositors get an incentive to take more risk because the cost of risk, in whole
or in part, is borne by others, generally a deposit insurance agency. The panel on 'Differential
Premium System for Banks in India', headed by RBI Executive Director Jasbir Singh, has classified
banks into low risk, moderate risk, medium risk and high risk categories and assigned reward
points to each category. Based on the risk category a bank falls in, the effective premium rate
could rise — 9.5 paise per Rs. 100 deposit for a low-risk bank; 10 paise for moderate risk; 11 paise
for medium risk; and 12.5 paise for high risk.
20 entities to get funding for promoting depositor awareness: RBI has released the names of
20 entities selected for grant of financial assistance from the Depositor Education and Awareness
(DEA) Fund. These 20 entities, including Consumer Education and Research Society (Ahmedabad),
Consumer Unity & Trust Society (Jaipur), Xavier Labour Relations Institute (Jamshedpur), and Indian
School of Microflnance for Women (Ahmedabad), have been selected out of 90 applications received
for registration. The Fund will grant financial assistance to institutions, organisations, and associations
for taking up activities relating to promoting bank depositors' education and awareness.
PSBs to get more flexibility in recruitments: The government has appointed a high-level panel
headed by Justice AP Shah, former chairman of the Law Commission, to ensure that public sector
banks have a level playing field vis-à-vis private sector banks when it comes to recruitment of
personnel. The panel will find out alternative options for public sector banks (PSBs) over and above
the existing procedures so that a level-playing field as close as possible with the private sector is
created and the former gets flexibility in the matter of recruitment of personnel.
RBI grants ‘in-principle’ approval to NPCI to function as the central unit for Bharat Bill
Payment Systems (BBPS): The Bharat Bill Payment System (BBPS), an integrated bill payment
system, will function as a tiered structure for operating the bill payment system in the country with a
single brand image, providing convenience of ‘anytime, anywhere’ bill payment to customers. It
includes utility payments, such as electricity, water, gas, telephone and direct-to-home (DTH) service.
Based on the experience, this would be extended to include other types of repetitive payments, like
school / university fees, municipal taxes etc. in future. As the central unit, NPCI will set necessary
operational, technical and business standards for the entire system and its participants, and also
undertake clearing and settlement activities. The Operating Units will function as entities facilitating
collection of bills/repetitive payments.
Axis Bank, 2 other entities get RBI nod to set up trade receivables discounting system:
Three entities — Axis Bank, Gurgaon-based Mynd Solutions and a joint bid by NSE Strategic
Investment Corporation and Small Industries Development Bank of India — have been granted in-
principle approval for setting up the Trade Receivables Discounting System (TReDS). The use of
TReDS is aimed at improving the flow of funds to micro, small and medium enterprises (MSMEs) by
reducing the receivables realisation cycles. TReDS will allow SMEs to post their receivables on the
system and get them financed.
Committee likely to go into sector-specific NPAs of PSBs: The finance ministry might set up a
committee under Minister of State for Finance Jayant Sinha to look into sector-specific non-
performing assets (NPAs) of state-owned banks. Gross NPAs of state-owned lenders rose to 6.03 per
cent of gross advances at the end of June, against 5.20 per cent in March. The government is looking
into the problems faced by steel, aluminium and textile sectors.
In Pradhan Mantri Jan-Dhan Yojana, Rs 27,000 crore is deposits under the scheme. At the same time,
zero-balance accounts have come down to about 35 per cent.
Forex reserves down $150 mn to $352 bn: India's foreign exchange reserves declined $149.7
million to $352.4 billion during the week ended November 20, due to fall in foreign currency assets
(FCAs).
Exports may fall below $300 bn by 2015-16 end: India will miss its export target of $325 billion
due to a slump in the global economy but the number might end up below $300 billion by the end of
2015-16. India reported exports of $312 billion against a target of $340 billion in 2014-15.
Financial inclusion focus can give banks $380-bn biz: A report by Accenture and CARE
International UK has stated that banks in emerging markets can harvest a potential $380 billion in
additional business through financial inclusion. Accenture and CARE surveyed 30 banks in 12
developing countries in Africa, Asia and Latin America, but only seven had a "coherent corporate
strategy leading to long-term, sustainable investment plans to develop inclusive business models.
India's unbanked population more than halved to 233 million in 2015, from 557 million in 2011,
according to a recent report by PwC. The numbers fell following the launch of the Pradhan Mantri
Jan Dhan Yojana plan on August 15, 2014. So far 192 million accounts have been opened and Rs

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26,819 crore deposits mobilized. Out of these accounts, 36.5 per cent of the accounts are zero-
balance or accounts with no minimum balance requirement.
Govt allows 100% FDI in five plantation crops: The Govt has allowed 100 per cent foreign direct
investment (FDI) in five plantation crops - coffee, rubber, cardamom, palm oil tree and olive oil tree -
via the automatic route. At present, 100 per cent FDI is allowed only in tea plantations through the
government approval route. The country produces around 300,000 tonnes of coffee annually, about
900,000 tonnes of rubber and about 17,000 tonnes of cardamom.
Set up an ‘Insolvency Regulator’: The TK Viswanathanheaded committee on Bankruptcy Law
Reforms has proposed an easy exit option for low-income individuals unable to repay debts. The
comprehensive draft Insolvency and Bankruptcy Bill, part of a report on ‘Bankruptcy law reforms’
envisages two distinct processes — Fresh Start and Insolvency Resolution — to deal with individual
bankruptcy. In the Fresh Start process, indigent individuals with income and assets lower than
specified thresholds (annual gross income not exceeding Rs. 60,000 and aggregate value of assets
not exceeding Rs. 20,000) shall be eligible to apply for a discharge from their “qualifying debts”. A
resolution professional will investigate and prepare a final list of all qualifying debts of the individual
within 180 days from the date of application. On the expiry of this period, the adjudicating authority
will decide whether to discharge the debtor from the qualifying debts and accord him an opportunity
to make a fresh start financially. In the Insolvency Resolution Process, the creditors and debtor will
negotiate to arrive at a mutually agreeable repayment plan under the supervision of a resolution
professional. The bankruptcy of an individual can be initiated only after the failure of the resolution
process. The bankruptcy trustee will be responsible for administration of the estate of the bankrupt
and for distribution of the proceeds on the basis of priority. The draft Bill has consolidated existing
laws relating to insolvency of companies, limited liability entities (including limited liability
partnerships and other entities), unlimited liability partnerships, and individuals. It has also
recommended the setting up of an “Insolvency Regulator” to exercise regulatory oversight over
insolvency professionals, insolvency professional agencies and informational utilities.
Faster recovery a shot in the arm for bankers: The committee on a new bankruptcy law has
recommended that banks be allowed to take charge of the entire business for a single default by a
borrower. According to the proposals of the committee, a bankruptcy petition can be filed the next
day after a company has defaulted. One single default and the promoter can lose control of his
enterprise. The committee has recommended six to a maximum of nine months to deal with
insolvency and enable winding-up of operations of a company or a limited liability entity.
Norms relaxed for claiming personal accident cover under RuPay Cards: Account holders
under the Pradhan Mantri Jan Dhan Yojana (PMJDY) with RuPay Cards have the Rs. 1 lakh accident
insurance cover. One stipulation for making the claim under accidental death or permanent disability
was that the RuPay Card holder has to carry-out at least one successful transaction...up to 45 days
prior to the date of incident resulting into claim. NPCI has extended 45 days usage condition to 90
days for RuPay Classic cardholders with effect from November 25, 2015.
Sebi permits ETFs to invest in Gold Monetisation Scheme:The Securities and Exchange Board of
India (SEBI) has allowed gold exchange traded funds (ETFs) to invest in the recently-launched gold
monetisation scheme. However, the total exposure of the gold ETF towards the monetisation scheme
should not exceed 20% of the assets under management (AUMs) of the scheme.
External debt rises 1.7% in Apr-Sep to $483.2 bn: India's external debt edged up by 1.7 per
cent during the first six months of the ongoing fiscal to USD 483.2 billion at the September-end. The
rise in external debt during the period was due to long-term external debt particularly commercial
borrowings and NRI deposits. Share of commercial borrowings was highest at 37.7 per cent of total
external debt, followed by NRI deposits at 25.2 per cent and multilateral debt at 11 per cent. The
ratio of short-term external debt to foreign exchange reserves was 24.6% at end-September 2015 as
against 25% at end-March 2015.
Kelkar panel shows the way to revive PPP in infra projects: A committee reviewing public-
private partnership (PPP) in infrastructure has suggested the revival of a defunct proposal to establish
3P India to support PPP projects. It has also called for a rational allocation of risks among various
stakeholders in a project, and moving away from the one-size-fits-all approach to PPP model
concession agreements (MCAs). The panel, headed by former finance secretary Vijay Kelkar,
recommended setting up independent regulators for PPP projects in various sectors and pushed for
amendment to the Prevention of Corruption Act to clarify the difference between cases of graft and
genuine errors in decision-making. At present, over 12,007 PPP projects are being implemented,
involving about Rs. 7.2-lakh crore. Key recommendations of the Committee include - Roads: Increase
concession period for BOT projects; Introduce hybrid models, viable gap funding, part annuity,
operation and maintenance grants, etc for nonBOT projects; Relax exit norms; Dispose pending cases
between developers and NHAI; Shift to electronic tolling in time-bound manner; (b) Ports: Move from
pre-TAMP (tariff authority for major ports) to current-TAMP; Strengthen and accelerate
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environmental clearance; Provide support infrastructure (including land, reliable access to utilities,
dredging, rail, roads) to developer. (c) Railways: Take up simpler projects first to build credibility.
Such projects can be brownfield — monetisation of existing stations — or, greenfield —development
of new stations; Set up regulatory authority to settle technical issues such as track-access charges.
(d) Power: Not many power projects are under PPP. But the sector has a far-reaching impact on
infrastructure PPPs. Immediately address power sector finances as they are hurting bank loans. (e)
Airports: Prepare a policy that addresses the expected growth parameters of the sector and
promotes PPPs; Concession agreement should stipulate important commercial parameters like return
on equity, treatment of land for noncommercial purposes; Develop brownfield and greenfield airports
with defined structure, revenue sharing mechanisms.
RBI panel for direct transfer of cash, abolishing farm subsidy: The committee on medium-
term path on financial inclusion, headed by RBI executive director Deepak Mohanty has suggested
that the government should transfer cash directly to persons instead of giving subsidies, and should
replace interest subvention on agriculture loans with affordable universal crop insurance scheme for
small and marginal farmers at a heavily subsidised rate, the money for which can be funded by doing
away with the current interest subsidy scheme. The panel said that agricultural credit must flow to
the actual cultivator for which tamper-proof digitisation of land records was a must.
RBI panel takes woman, girl-child route to financial inclusion: To push financial inclusion,
Deepak Mohanty panel has recommended a special deposit scheme for the girl child, government-to-
person social cash transfer, and opening interest-free windows (Islamic banking) by banks. The
committee has suggested for a welfare scheme — Sukanya Shiksha — that can be jointly funded by
the Central and State governments. The scheme will link education with banking habits by crediting
a nominal amount in the name of each girl child belonging to the lower income group who enrols in
middle school. Given the low level of personal disposable income, particularly for the bottom quartile
of the population, the RBI committee is of the view that meaningful financial inclusion will not
happen without Government-to-Person (G2P) social cash transfers.
Key Recommendations of Deepak Mohanty Committee on medium-term path on financial
inclusion: (a) phase out interest subvention scheme and ploughing the subsidy amount into a
mandatory crop insurance scheme for small and marginal farmers; (b) Banks to open more accounts
for females; (c) A new welfare scheme for girl child — Sukanya Shiksha; (d) Stepping up financial
inclusion in north-eastern, eastern and central states; (e) Aadhaar to be linked with each individual
credit account; (f) use of low-cost solution based on mobile technology for ‘last mile’ delivery; (g)
‘Gold KCC’ scheme for good borrowers; (h) Commercial banks to open specialised interest-free
windows with simple products; (i) RBI to take lead in creating a geographical information system to
map banking access points; (j) More bank credit to the MFI sector; (k) More ATMs in rural centres
Selection panel for Sebi chief reconstituted: The search cum selection panel for the next chief of
SEBI, would now include a representative from the prime minister's office (PMO). The panel, headed
by the cabinet secretary,
Forex reserves down $1.4 bn to $351 bn: India's total reserves, as on December 18, stood at
about $351.1 billion, down from $352.5 billion a week before that.
Too much of financial inclusion push can hurt banking sector: A report from the Financial
Stability and Development Council (FSDC) has stated that if banks aren’t adequately compensated for
financial inclusion exercise, it would become unprofitable for the sector. At the apex, FSDC is chaired
by the finance minister, besides having two other secretaries from that ministry. It also has the
governor of RBI and the heads of the regulatory bodies for the capital markets, insurance and pension
fund segments. UDAY's shadow lengthens over states' fiscal deficit: Ujwal Discom Assurance
Yojana (UDAY) scheme - aimed at allowing states to take over the debt burden of their respective
power distribution companies - may create problems on the fiscal front, with the combined Centre-
state fiscal deficit limit for 2015-16 likely to breach the level mandated by the Fiscal Responsibility &
Budget Management (FRBM) Act, by around 150 basis points (bps)
New PAN norms: From 1st January 2016, quoting of PAN is mandatory for the following
transactions - Cash dealings above Rs. 2 lakh including transactions through cash, cheque and
purchase of jewellery; all transactions of immovable property of over Rs. 10 lakh; all term deposits
of over Rs. 50,000 in not only banks but also in co-operative banks, post offices, nidhis, and non-
banking finance companies; opening an account (except basic account) in any bank, including
cooperative banks; Cash payments to settle hotel bills and for foreign travel, such as purchase of
tickets or buying foreign exchange of over Rs. 50,000; Opening of demat accounts, buying shares of
listed companies which are worth more than Rs. 1 lakh, or purchasing debentures, RBI bonds, life
insurance policies, and mutual funds of over Rs. 50,000; purchase of gift cards or cash cards of over
Rs. 50,000. PAN will no longer be required for installation of telephone or cell-phone connections.
Persons who do not hold PAN are required to fill a form and furnish any one of the specified
documents to establish their identity. Opening of a no-frills bank account such as Jan Dhan will not
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require PAN.
Bankruptcy Bill introduced in Lok Sabha as a money Bill: The government introduced the
'Insolvency and Bankruptcy Code 2015', or the bankruptcy Bill, in the Lok Sabha. The Bill has been
introduced as a money Bill, which means it will not have to be passed in the Rajya Sabha. The Bill
provides a timeline of six months, or 180 days, to a maximum of nine months, or 270 days, to deal
with insolvency and enable winding-up of operations of a company or a limited liability entity. It also
provides for fast-track resolution of corporate insolvency within 90 days. It also provides for setting up
of a 'Insolvency and Bankruptcy Board of India' to regulate professionals, agencies and information
utilities engaged in resolution of insolvencies of companies, partnership firms and individuals. During
the insolvency resolution period, an interim resolution professional would manage the debtor. The
professional would prepare a plan that needs to be approved by a majority of 75 per cent of voting
share of the financial creditors. Once the plan is approved, the adjudicating authority must give its
nod. However, if an insolvency resolution plan is rejected, the adjudicating authority will order for
liquidation. The Bill recommends the existing Debt Recovery Tribunals be the adjudicating authority
for individuals and unlimited liability partnership firms. And, that the National Company Law Tribunal
be the one for companies and limited liability entities.
Monetary limit for filing appeals in tax cases raised: The finance ministry has raised the
monetary limit for filing appeals to Rs 10 lakh in appellate tribunal, and Rs 20 lakh in high courts
(HCs). It has been decided to withdraw appeals filed by the income tax (I-T) department in Income
Tax Appellate Tribunal (ITAT) and high courts for cases involving tax effect of below the new
monetary limit. There are 75,000 cases pending in ITAT and HC. Tax effect refers to the difference
between what the I-T department's assessment of tax liability and assessee’s assumption.
Wholesale prices drop for 13th straight month in November: Wholesale Price Index (WPI)-
based inflation fell for a 13th straight month in November, dropping 1.9 per cent compared to 3.8
per cent in October. In 1975-76, there was WPI-based deflation for a full year; it was in October
2014 that inflation was last seen, at 1.66 per cent. Overall, food inflation accelerated to 5.2 per
cent in November from the 2.44% rise seen in the previous month.
November retail inflation at 5.41%: Consumer Price Index-based (CPI) inflation for the month
of November rose to 5.41 per cent, the highest in at least a year, compared with five per cent in
October and 3.27 per cent in November 2014.
India fourth-largest source of black money: As per a report by Global Financial Integrity (GFI),
India has been ranked the fourth-biggest source of black money with $510 billion worth of illicit
financial flows during 2004-2013, or $51 billion annually, on average. The report says China tops the
list for 2004-2013, with $139 billion average illicit financial flow per annum, followed by Russia ($104
billion per annum) and Mexico ($52.8 billion per annum).
Use Rs. 2,000-cr financial inclusion fund to set up more ATMs: The RBI’s committee on
medium-term path on financial inclusion headed by Deepak Mohanty, Executive Director, RBI, has
recommended that the Rs. 2,000 crore Financial Inclusion Fund should be utilised to encourage
installation of ATMs in rural and semi-urban centres. As of 2014 there were only 18 ATMs per one
lakh adult population in India against over 65 in South Africa and over 180 in Russia. As at October-
end 2015, there were 1,90,827 ATMs in the country. The Committee recommended that
interoperability of micro ATMs should be allowed to facilitate the usage of cards by customers in semi-
urban and rural areas across any bank micro ATM and Business Correspondent (BC). Micro ATMs are
handheld devices (usually operated by BCs) that allow customers to perform basic financial
transactions using only their Aadhaar number and their biometric/OTP as identity proof (along with a
Bank Identification Number for inter-bank transactions). Unlike an ATM, the cash-in/cash-out
functions of the micro ATM are performed by an operator.
Auditors need to report to Centre corporate frauds of over Rs. 1 cr: Statutory auditors will now
have to mandatorily report to the Centre all corporate frauds amounting to Rs. 1 crore or above. The
auditor has to inform the Board or audit committee and seek their views within 45 days. On receipt of
audit committee’s views, the auditor would send his report to Centre within 15 days. For frauds
involving amounts lower than Rs. 1 crore, statutory auditors now need to report this matter only to
the audit committee of the company. Prior to this Ministry move, the company law required statutory
auditors to report to the Centre all frauds by the company or against it.
Dividend policy must be seen as strategic business decision: RBI has advised that public
sector banks (PSBs) approach their dividend decisions as strategic business decisions in keeping with
their objective of shareholder wealth maximisation. In its financial stability report, the central bank
observed that PSBs pay out significant amounts as dividend to the government and other
shareholders which have no relevance to their balance sheet strengths and capital planning. The
payout also reveals a cross-subsidisation by better banks (given their relatively higher payouts but a
disproportionately higher capital infusion into weaker banks by the government.

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IDRBT to develop framework for digital banking solutions: The Institute for Development and
Research in Banking Technology (IDRBT) has outlined plans to launch a Digital Banking Framework.
FinMin looking to prune tax exemptions before GST rollout: The Finance Ministry is now looking
to prune the Central list of exemptions and bring it to the level of States. Currently, the number of
exemptions at the Central level stands at 292 (excise duty exemptions) while at the State level it is
90 (VAT related).
Three out of four Indians are not financially literate: According to a survey by Standard & Poor’s
Ratings Services, three out of every four Indian adults are not financially literate. The rating agency’s
Global Financial Literacy Survey tested 1,50,000 adults from 140 countries on their knowledge of four
basic financial concepts: numeracy, risk diversification, inflation, compound interest (saving and
debt).
Liquidity coverage ratio will impact profitability of banks: According to India Ratings,
introduction of liquidity coverage ratio (LCR) is a positive step for the banking sector, but it could
come at a high transition cost for some banks. Any short-term liquidity crunch could lead to
solvency issues with banks that do not have contingent liquidity plans in place. Basel III regulations
have introduced LCR to quantify this risk. LCR is a regulatory requirement for banks to set aside a
certain amount of highly-liquid assets, such as cash or Treasury bonds, to meet short-term liquidity
disruptions. Hence, banks have that much less availability of short-term funds. The monthly
average ratio stood at 101.5% for Indian banks as of March 2015 against required minimum
requirement of 60%. This requirement will be ratcheted up to 100% by March 2019. Mutual funds
to stick to uniform commission: Mutual fund houses have agreed to stick to a uniform structure
on how much commission they pay distributors. Under the guidelines issued by Association of
Mutual Funds of India, the up-front commission has been capped at 100 basis points.

RBI GUIDELINES 2015-16 (Q/A)

1. Discontinuation of the requirement for Paper to Follow (P2F) for Central Government
cheques under Cheque Truncation System (December 31, 2015): The current requirement of
forwarding the paid Central Government cheques in physical form (commonly known as P2F) to
the Government departments has been dispensed with. The government cheques would be paid in
CTS clearing solely based on their electronic images. The paid cheques in physical form would be
retained by the presenting bank. The presenting banks are required to preserve the physical
instruments in their custody securely for a period of 10 years. Drawee banks shall preserve the
images of all government cheques for a period of 10 years with themselves or through the
National Archival System of National Payments Corporation of India (NPCI).
2. Roadmap for opening brick and mortar branches in villages with population more than
5000 without a bank branch of a scheduled commercial bank (December 31, 2015): SLBC
Convenor banks should identify villages with population above 5000 without a bank branch of a
scheduled commercial bank in their State. The identified villages may be allotted among scheduled
commercial banks (including Regional Rural Banks) for opening of branches. The opening of bank
branches under this Roadmap should be completed by March 31, 2017.
3. Withdrawal of all old series of Banknotes issued prior to 2005 (December 23, 2015): RBI
has decided to extend the date for exchanging the pre-2005 banknotes to June 30, 2016.
However, from January 01, 2016, such facility will only be available at identified bank branches
and Issue Offices of RBI. All denominations of banknotes issued prior to 2005 series have to be
exchanged.
4. Interest Rates on Advances (December 17, 2015): (i) All rupee loans sanctioned and credit
limits renewed w.e.f. April 1, 2016 will be priced with reference to the Marginal Cost of Funds
based Lending Rate (MCLR) which will be the internal benchmark for such purposes; (ii) The MCLR
will comprise of: (a) Marginal cost of funds; (b) Negative carry on account of CRR; (c) Operating
costs; (d) Tenor premium; (iii) Marginal Cost of funds will comprise of Marginal cost of borrowings
and return on net worth; (iv) Negative Carry on CRR: which arises due to return on CRR balances
being nil, will be calculated as under: Required CRR x (marginal cost) / (1- CRR). (v). Operating
Costs: associated with providing the loan product including cost of raising funds will be included
under this head; (vi) Tenor premium: These costs arise from loan commitments with longer tenor;
(vii) Spread: Banks shall adopt the following broad components of spread: a). Business strategy;
b) Credit risk premium; (viii) Interest Rates on Loans: Actual lending rates will be determined
by adding the components of spread to the MCLR; ix) Exemptions from MCLR: a). Loans
covered by schemes specially formulated by Government of India wherein banks have to charge
interest rates as per the scheme; b). Working Capital Term Loan (WCTL), Funded Interest Term
Loan (FITL), etc. granted as part of the rectification/restructuring package; c). Loans granted

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 under various refinance schemes formulated by Government of India; (d) Advances to banks’
depositors against their own deposits; (e) Advances to banks’ own employees including retired
employees; (f) Advances granted to the Chief Executive Officer / Whole Time Directors; (g) Loans
linked to a market determined external benchmark; (h) Fixed rate loans granted by banks. x)
Review of MCLR: Banks shall review and publish their Marginal Cost of Funds based Lending
Rate (MCLR) of different maturities every month on a pre-announced date. xi) Reset of interest
rates: Banks may specify interest reset dates on
their floating rate loans. Banks will have the option to offer loans with reset dates linked either to the
date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset
shall be one year or lower. The exact periodicity of reset shall form part of the terms of the loan
contract; xii) Calculation of Marginal cost of Funds: (a) Marginal cost of Borrowing = (Rates
offered on a particular type of deposit on the date of review/ rates at which funds raised) x Balance
outstanding as on the previous day of review as a percentage of total funds (other than equity); (b)
Weightage of Marginal cost of borrowings: Marginal cost of borrowing shall have a weightage of 92%
of Marginal Cost of Funds while return on net worth will have the balance weightage of 8%; (c)
Return on net worth: The weightage given for this component in the marginal cost of funds will be
8%. (d) Marginal cost of funds = 92% x Marginal cost of borrowings + 8% x Return on net
worth
5. Maintenance of Statutory Liquidity Ratio (SLR): RBI has decided to reduce the Statutory
Liquidity Ratio (SLR) from 21.5 per cent of their Net Demand and Time Liabilities (NDTL) to: (i)
21.25 per cent from April 2, 2016; (ii) 21.00 per cent from July 9, 2016; (iii) 20.75 per cent from
October 1, 2016; and (iv) 20.50 per cent from January 7, 2017.
6. Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit (December
4, 2015): The Government of India has announced the Interest Equalisation Scheme (earlier
called Interest Subvention Scheme) on Pre and Post Shipment Rupee Export Credit to eligible
exporters. The scheme is effective from April 1, 2015. Salient features of the scheme are given
below: (a) The rate of interest equalisation would be 3 percent and will be available on Pre
Shipment Rupee Export Credit and Post Shipment Rupee Export Credit; (b) The scheme would
be applicable w.e.f 01.04.2015 for 5 years. (c) The scheme will be available to all exports under
416 tariff lines [at ITC (HS) code of 4 digit] and exports made by Micro, Small & Medium
Enterprises (MSMEs) across all ITC(HS) codes; (d) Scheme would not be available to merchant
exporters; (e) A study may be initiated on the impact of the scheme on export promotion on
completion of 3 years of the operation of the scheme through one of the IIMs.
7. Engagement of Services of Expatriate Officers in Indian Offices of Foreign Banks
(November 26, 2015): A foreign bank can deploy a maximum of four expatriates for each branch
opened in India and not more than six expatriates for their Head Office functions.
8. Central KYC Records Registry (CKYCR) - template for Know Your Customer (KYC)
(November 26, 2015): The proposed CKYCR would receive, store, safeguard and retrieve the KYC
records in digital form of a client. The KYC records received and stored by the CKYCR could be
retrieved online by any reporting entity across the financial sector for the purpose of establishing
an account based relationship. 1. Officially valid document means and includes the letter issued
by the Unique Identification Authority of India or National Population Register containing details
of name, address. 2. Every reporting entity shall within three days after the commencement of
an account-based relationship with a client, file the electronic copy of the client’s KYC records
with the Central KYC Records Registry. The Central KYC Records Registry shall issue a KYC
Identifier for each client to the reporting entity, which shall communicate the KYC Identifier in
writing to their client. Where a client, submits a KYC Identifier to a reporting entity, then such
reporting entity shall retrieve the KYC records online from the Central KYC Records Registry by
using the KYC Identifier and shall not require a client to submit the same KYC records or
information or any other additional identification documents or details.
9. Import of Goods into India – Evidence of Import (November 26, 2015): An importer has to
submit as evidence of import, (a) the exchange control copy of the Bill of Entry for home
consumption; (b) the exchange control copy of the Bill of Entry for warehousing, in the case of
100% Export Oriented Units (EOUs); or (c) Customs Assessment Certificate or Postal Appraisal
Form as declared by the importer to the Customs Authorities; (d) Ex-Bond Bill of Entry
10. Bank Finance to Factoring Companies (November 26, 2015): Banks can extend financial
assistance to support the factoring business of Factoring Companies provided they derive at least
50% of their income from factoring activity and the receivables purchased / financed, form at least
50% of the assets of the Factoring Company.
11. Priority Sector Lending – Targets and Classification (November 18, 2015): Banks should
ensure that their overall direct lending to non-corporate farmers does not fall below the system-
wide average of the last three years achievement. For FY 2015-16, the applicable system wide
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 average figures for computing achievements under priority sector lending will be 11.57 percent.
12. Software Export – Filing of bulk SOFTEX (November 05, 2015): All software exporters can file
single as well as bulk SOFTEX form in excel format to the competent authority for certification.
13. Switching from Barter Trade to Normal Trade at the Indo-Myanmar Border (November 05,
2015): RBI has decided to do away with the barter system of trade at the Indo-Myanmar border
and switch over completely to normal trade with effect from December 1, 2015. All trade
transactions with Myanmar, including those at the Indo-Myanmar border with effect from
December 1, 2015 would be settled in any permitted currency in addition to the Asian Clearing
Union mechanism.
14. Sovereign Gold Bonds, 2015-16 (October 30, 2015 & November 4, 2015): The Bonds shall be
denominated in units of one gram of gold and multiples thereof. Minimum permissible investment
will be 2 units (i.e. 2 grams of gold). Maximum limit: The maximum amount subscribed by an
entity will not be more than 500 grams per person per fiscal year (April-March). Price of the Bonds
shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple
average closing price for gold of 999 purity, published by the India Bullion and Jewellers
Association Ltd. (IBJA). The Bonds shall bear interest at the rate of 2.75 per cent (fixed rate) per
annum on the amount of initial investment. The Bonds shall be repayable on the expiration of
eight years from the date of issue. Pre-mature redemption of the Bond is allowed from fifth year
of the date of issue on the interest payment dates. The redemption price shall be fixed in Indian
Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for
gold of 999 purity, published by IBJA.
12. Gold Monetisation Scheme, 2015 (October 22, 2015 & November 3, 2015): Resident Indians
(Individuals, HUFs, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI
(Mutual Fund) Regulations and Companies) can make deposits under the scheme. All deposits under
the scheme shall be made at the Collection and Purity Testing Centre (CPTC). However, at their
discretion, banks may accept the deposit of gold at the designated branches, especially from the
larger depositors. The minimum deposit at any one time shall be raw gold (bars, coins, jewellery
excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. There is no
maximum limit for deposit under the scheme. All transactions under the scheme with the designated
bank shall be in gold of 995 fineness. All gold deposits under the scheme, whether tendered at the
CPTC or the designated branches, shall be assayed at CPTC. Short Term Bank Deposit (STBD) will be
made with the designated banks for a short term period of 1-3 years. Medium and Long Term
Government Deposit (MLTGD): will be accepted by the designated banks on behalf of the Central
Government. This deposit will not be reflected in the balance sheet of the designated banks. The
deposit can be made for a medium term period of 5-7 years or a long term period of 12-15 years.
Gold accepted under STBD may be sold by banks to MMTC for minting India Gold Coins (IGC), to
jewelers. Gold accepted under MLTGD: will be auctioned by MMTC or any other agency authorized by
the Central Government and the sale proceeds credited to the Central Government’s account with
RBI. Interest Rate: On medium term deposit – 2.25% p.a.; On long term deposit – 2.50% p.a.
15. RBI grants ‘in-principle’ approval to NPCI to function as the central unit for Bharat Bill
Payment Systems (BBPS): The Bharat Bill Payment System (BBPS), an integrated bill payment
system, will function as a tiered structure for operating the bill payment system in the country
with a single brand image providing convenience of ‘anytime anywhere’ bill payment to customers.
16. Dr. Raghuram Rajan appointed as Vice-Chairman on BIS Board: Dr. Raghuram Rajan,
Governor of the Reserve Bank of India, was elected as the Vice-Chairman, the Board of Directors
of the Bank for International Settlements (BIS).
17. Subscription to National Pension System by Non-Resident Indians (NRIs) (October 29,
2015): RBI, has decided to enable National Pension System (NPS) as an investment option for
NRIs under FEMA, 1999.
18. KYC - ‘Officially Valid Documents’ - Change in name on account of marriage (October 29,
2015): A document shall be deemed to an “officially valid document” even if there is a change in
the name subsequent to its issuance, provided it is supported by a marriage certificate issued by
the State Government or a Gazette notification, indicating such a change of name.
19. Channeling transactions through Asian Clearing Union (ACU) (October 08, 2015): RBI has
decided to permit the use of the Nostro accounts of the commercial banks of the ACU member
countries, i.e., the ACU Dollar and ACU Euro accounts, for settling the payments of both exports
and imports of goods and services among the ACU countries.
20. Individual Housing
Sanctioned Amount of loan LTV Ratio Risk weight

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 Up to Rs.30 Lakh <= 80 35%

> 80 AND <=90 50%

Above Rs.20 Lakh but upto 75 Lacs <= 75 35%

>75 AND <= 80 50%

Loan amount more than Rs. 75 Lacs <=75% 75%

21. WMA Limits for Government of India for the second half of the Financial Year 2015-16:
will be Rs 20,000 crore.
22. RBI to issue Rs 50 Banknotes with Inset 'R' and Numerals in Ascending Size: RBI will
issue banknotes in Rs 50 denomination in Mahatma Gandhi Series - 2005, with the numerals in
both the number panels in ascending size from left to right while the first three alpha-numeric
characters(prefix) will remain constant in size. The Reserve Bank has already issued banknotes
with ascending size of numerals in the number panels in Rs 100, Rs 500, and Rs 1000
denominations.
23. Banknotes with new numbering pattern and special features for the visually impaired
(September 24, 2015): New banknotes in the denominations of Rs 100, Rs 500 and Rs 1000 will
have three new/revised features - (i) ascending size of numerals in the number panels, (ii) bleed
lines, and (iii) enlarged identification mark. The current banknotes will be without inset letter in
the number panels. Numerals in both the numbering panels of banknotes will be in ascending
size from left to right, while the first three alphanumeric characters (prefix) remain constant in
size. The banknotes of Rs 100 denomination will have four bleed lines, Rs 500 denomination will
have five angular bleed lines in three sets of 2-1-2 lines on the obverse in both, the upper left
and the right hand edge of the banknote. Similarly, Rs 1000 banknotes will have six angular
bleed lines in four sets of 1-2-2-1 lines on the obverse in both, the upper left and right hand edge
of the banknotes. These will facilitate identification of these notes by visually impaired persons.
The existing identification mark (circular-shape in Rs 500 and diamond in Rs 1000) near the left
edge of the banknote has been enlarged by 50%.
24. RBI to issue Rs5 Coins to commemorate “Golden Jubilee of Indo-Pak War 1965": RBI will
shortly put into circulation Rs 5 coins minted by the Government of India to commemorate the
Golden Jubilee of Indo-Pak war 1965.
25. Timing for RTGS: Customer's transactions from 8.00 hours to 16.30 hours on week days and
working Saturdays.
26. Cash Withdrawal at Point-of-Sale (POS) – (August 27, 2015): Bank customers can
withdraw cash at POS terminals upto Rs 1000 per day at Tier I and Tier II centres and Rs.2000/-
per day in Tier III to VI centres against all debit cards issued in India. Maximum Customer
charges, if any, 1% of the transaction amount.
27. Detection of Counterfeit Notes (August 27, 2015): Acknowledgement to tenderer: When a
banknote tendered at the counter of a bank branch is found to be counterfeit, an
acknowledgement receipt must be issued to the tenderer, after stamping the note with Counterfeit
Note Stamp. The receipt, should be authenticated by the cashier and tenderer. The receipt is to be
issued even in cases where the tenderer is unwilling to countersign it. No credit to customer’s
account is to be given for counterfeit notes, if any, in the tender received over the counter.
28. Counterfeit notes - Reporting to Police and other bodies: For cases of detection of counterfeit
notes upto 4 pieces, in a single transaction, a consolidated report should be sent by the Nodal
Bank Officer to the police or the Nodal Police Station, along with the suspect counterfeit notes, at
the end of the month; (ii) For cases of detection of counterfeit notes of 5 or more pieces, in a
single transaction, the counterfeit notes should be forwarded by the Nodal Bank Officer to the
local police authorities or the Nodal Police Station for investigation by filing FIR.
29. Interest Subvention Scheme for crop loans (August 13, 2015): Subvention is available for
short term crop loans upto Rs 3.00 lakhs. Interest subvention @ 2% per annum will be made
available to banks provided the lending institutions makes credit at 7% p.a. to the farmers.
Additional interest subvention @3% per annum will be available to the farmers repaying the loan
in time. In respect of 2% interest subvention, banks are required to submit their claims on a half-
yearly basis as at September 30, 2015 and March 31, 2016.
16. Interest Rate Cap under Credit Guarantee Scheme (CGS) of CGTMSE (July 15, 2015): For
coverage of any credit facility sanctioned by banks under CGS, to eligible Borrowers, bank can
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 charge maximum interest rate of Base Rate plus 2% for loans up to Rs 50 lakh and Base Rate plus
3% for loans more than Rs 50 lakh.
17. Priority Sector Lending – Targets and Classification (July 16, 2015): Banks should ensure
that their overall direct lending to non-corporate farmers does not fall below the system-wide
average of the last three years achievement failing which they will attract the usual penalties for
shortfall. Banks should also continue to maintain all efforts to reach the level of 13.5% direct
lending to the beneficiaries who earlier constituted the direct agriculture sector.
18. Deposits placed with NABARD/SIDBI/NHB for meeting shortfall in Priority Sector
Lending by Banks (July 16, 2015): Deposits placed with NABARD/SIDBI/NHB on account of
shortfall in priority sector targets should be included under Schedule 11- ‘Other Assets’ under the
subhead ‘Others’ of the Balance Sheet.
19. NPA Norms pertaining to Advances – Credit Card Accounts (July 16, 2015): ‘Past due’
status of a credit card account for the purpose of asset classification would be reckoned from the
payment due date mentioned in the monthly credit card statement. However, banks shall report a
credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz.
late payment charges, etc., if any, only when a credit card account remains ‘past due’ for more
than three days.
30. Withdrawal of all old series of Banknotes issued prior to 2005 (June 26, 2015): RBI has
extended the date for exchanging the pre-2005 banknotes to December 31, 2015.
31. Liberalised Remmitance Scheme (1.6.2015): Remittance limit by individuals under LRS has
been increased from USD 125,000 to USD 250,000 per financial year. All the facilities like
private/business visits, medical treatment, education, gift, donation available to resident
individuals shall now be subsumed under the overall limit of USD 250,000. For emigration,
expenses in connection with medical treatment abroad and studies abroad, individuals may avail
of exchange facility for an amount in excess of the overall limit prescribed under the LRS, if it is so
required by a country of emigration, medical institute offering treatment or the university
respectively.
32. SUKANYA SAMRIDDHI ACCOUNT: The account may be opened by the natural or legal guardian
in the name of a girl child from the birth of the girl child till she attains the age of ten years.
Minimum deposit in a financial year – Rs 1000. Maximum deposit in a financial year – Rs 150,000.
Interest on deposit: For FY 2015-16, it is 9.2% p.a. The account shall mature on completion of
twenty-one years from the date of opening of the account.
33. Banks to appoint Internal Ombudsman: All public sector banks and ICICI Bank Ltd., HDFC
Bank Ltd., Axis Bank Ltd., Kotak Mahindra Bank Ltd., IndusInd Bank Ltd., Standard Chartered
Bank, Citi Bank N.A. and HSBC Ltd. should appoint an internal ombudsman.
34. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): The scheme will be implemented from
June 1st, 2015. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme offers life insurance
worth Rs 2 lakhs at Rs 330 per annum. The scheme is available to all bank account holders whose
age is between 18 to 50 years.
35. Pradhan Mantri Suraksha Bima Yojana (PMSBY): The scheme will be implemented from June
1st, 2015. Pradhan Mantri Suraksha Bima Yojana (PMSBY) offers accident insurance worth Rs 2
lakhs at Rs 12 per annum. The scheme is available to all bank account holders whose age is
between 18 to 70 years.
36. Interest Rates on Deposits: banks can offer differential rates of interest on term deposits on
the basis of tenor for deposits less than Rs 1 crore and on the basis of quantum and tenor on term
deposits of Rs 1 crore and above.
37. Revision of interest rates for Small Savings Schemes for FY 2015-16: 5 year SCSS, 2004:
9.3% p.a; PPF, 1968: 8.7% p.a; Kisan Vikas Patra: 8.7% p.a; Sukanya Samriddhi Account
Scheme: 9.2%
38. ‘Framework for Revitalising Distressed Assets in the Economy - Refinancing of Project Loans, Sale
of NPA and Other Regulatory Measures’ prescribed by RBI
39. Only one proof of address required. On transfer of account, separate proof of new address not
required. Only declaration by customer is sufficient regarding new address. Customer should
advise new address ( not the proof) within 2 weeks of the change of address
40. Non-Resident Deposits - Stat 5 and Stat 8 Returns: Submission of Stat 5 and Stat 8 Returns
from March 2015 discontinued.
41. Persons with Disabilities (PwD) – Inclusion under Weaker Sections: (March 13, 2015):
RBI has decided that priority sector loans to Persons with Disabilities will be eligible for
classification under Weaker Sections category.
42. Import of Goods into India – Form A 1: Requirement of submitting request in Form A-1 to the
AD Category –I Banks for making payments towards imports into India discontinued.

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43. Export Credit Refinance facility discontinued from February 7, 2015.
44. Dispensing with ‘No Due Certificate’ for lending by banks (January 28, 2015): ‘No Due
Certificate’ not to be obtained from the individual borrowers (including SHGs & JLGs) in rural and
semi-urban areas for all types of loans including loans under Government Sponsored Schemes,
irrespective of the amount involved.
45. Interest Rates on Advances (January 19, 2015): Review of Base Rate: Banks should review the
Base Rate at least once in a quarter.
46. Entry of Banks into Insurance Business (January 15, 2015): (i) Banks setting up a
subsidiary/JV for undertaking insurance business with risk participation: a) Min net worth:
Rs.1000 crore; b) Min CRAR - 10 per cent; c) net non-performing assets: max 3 percent. For
insurance broking minimum net worth Rs 500 crore. Other conditions same.
Non-Cooperative Borrowers (Dec 22, 2014): A non-cooperative borrower is one who does not
engage constructively with his lender by defaulting in timely repayment of dues while having ability
to pay, thwarting lenders’ efforts for recovery of their dues by not providing necessary information
sought, denying access to assets financed / collateral securities, obstructing sale of securities, etc.
The cut off limit for classifying borrowers as non-cooperative would be those borrowers having
aggregate fund-based and non-fund based facilities of Rs.50 million (Rs 5 crore) from the concerned
bank/FI.
47. Introduction of Digital Life Certificates for Pensioners (December 9, 2014): Government
of India has since launched “Jeevan Pramaan”, a digital life certificate based on Aadhaar Biometric
Authentication.
48. Credit facilities to Minority Communities - Inclusion of Jain Community (December 03,
2014): Jain Community notified as a minority community in addition to five communities already
notified as minority communities, viz. Sikhs, Muslims, Christians, Zoroastrians and Buddhists.
49. KYC guidelines – clarifications (October 21, 2014): (i) Banks need not seek fresh proofs of
identity and address at the time of periodic updation, from those customers who are categorised
as ‘low risk’, in case of no change in status with respect to their identities and addresses.
50. KYC guidelines: If an existing KYC compliant customer of a bank desires to open another
account in the same bank, there should be no need for submission of fresh proof of identity and/or
proof of address for the purpose;
51. KYC guidelines: If a customer does not comply with KYC requirements despite repeated
reminders by banks, banks should impose ‘partial freezing’ by allowing all credits and disallowing
all debits with the freedom to close the accounts after 3 months notice followed by a reminder for
further period of three months. If the accounts are still KYC non-compliant after six months of
imposing initial ‘partial freezing’ banks may disallow all debits and credits from/to the accounts,
rendering them inoperative.
52. KYC – clarification on proof of address (October 13, 2014): For opening account, the
prospective account holder is required to given only one proof of address whether permanent or
current. Banks should not insist on submission of a proof of address for the current address when
a customer produces a proof of permanent address.
53. Usage of ATMs –free transactions at other bank’s ATM to SB customers: (1) Free
transactions at ATMs located in the six metro centres: viz. Mumbai, New Delhi, Chennai, Kolkata,
Bengaluru and Hyderabad - 3 free. This reduction will, however, not apply to small / no frills /
Basic Savings Bank Deposit account holders who will continue to enjoy five free transactions, as
hitherto; 2. Free transactions at Other Locations: At other locations five free transactions.
54. Usage of ATMs – Rationalisation of number of free transactions at own bank ATM (August
14, 2014): At least five free transactions
55. Charges for ATM transactions: Beyond free transactions, there will be a ceiling / cap on
customer charges of Rs.20/- per transaction (plus service tax, if any) as at present.
56. Amendment to Public Provident Fund Scheme (August 22, 2014): Maximum individual
subscription limit under the Public Provident Fund (PPF) Scheme: Rs 1,50,000 in a financial year.
57. Pradhan Mantri Jan Dhan Yojna: Account holders will be provided zero-balance bank account
with RuPay debit card, in addition to inbuilt accidental insurance cover of Rs 1 lakh. Additional
Rs.30,000 life assurance cover for those opening bank accounts before Jan 26, 2015. Holders can
avail overdraft of Rs 5,000 from the bank subject to satisfactory operations of the account for six
months.
58. Reporting of Defaulters (Jun 27, 2014): Banks/FIs should furnish the data in respect of wilful
defaulters(non-suit filed accounts) of Rs. 25 lakhs and above and the data on defaulters(non-suit
filed accounts) of Rs. 1 crore and above to CICs and not to RBI.
59. Use of Business Correspondents (June 24, 2014): Banks will be permitted to engage non-
deposit taking NBFCs (NBFCs-ND) as BCs. The stipulation regarding distance criteria discontinued.

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60. Export and Import of Currency (June 19, 2014): Any person resident in India may take outside
India (other than to Nepal and Bhutan) or may bring into India at the time of his return from any
place outside India (other than from Nepal and Bhutan), Indian currency up to Rs.25,000.
61. Bank Branches / ATMs to be made accessible to persons with disabilities (May 21, 2014):
Banks should make all new ATMs installed from July 1, 2014 as talking ATMs with Braille keypads.
62. Levy of penal charges on non-maintenance of minimum balances in inoperative
Accounts (May 6, 2014): Banks are not permitted to levy penal charges for non-maintenance of
minimum balances in any inoperative account.
63. Levy of foreclosure charges/pre-payment penalty on Floating Rate Term Loans (May 7,
2014): Banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all
floating rate term loans sanctioned to individual borrowers.
64. Which organizations have been granted “in-principle” approval by RBI for banking licences?: IDFC
Limited and Bandhan Financial Services Private Limited.
65. A non-performing asset in the books of a bank shall be eligible for sale to other banks only if it has
remained a non-performing asset for: No time limit (earlier two years in the books of the sellig
bank)
66. A non-performing financial asset should be held by the purchasing bank in its books at least for a
period of ____ months before it is sold to other banks: 12 months.
67. RBI has decided that the Capital Conservation Buffer (CCB) would be implemented from___ in
phases and would be fully implemented as on_____: March 31, 2016; March 31, 2019.
68. RBI has prepared the Depositor Education and Awareness Fund Scheme, 2014 under which Act?:
Section 26A of Banking Regulation Act, 1949.
69. Max claim under Credit Guarantee Scheme for MSE restricted to: Rs 50 lac
70. As per KYC, record of documents taken at the time of opening the account to be maintained for: 5
years from date of closure of account.
71. As per KYC, record of transactions reported to FIU to be maintained for: 5 years from date of
transaction.
72. Advance to Small service enterprise including Transport operator, Retail Trade, Small Business
and Professional and self employed to be treated as P. S. if the advance is up to: Rs 10 crore.
73. Export Bills should be realized within: 9 months from date of export in all cases except when
goods are sent for warehousing
74. Periodicity of payment of interest on SB, FD, NRO, NRE: Bank discretion
75. Minimum cash balance to be kept with RBI on any day of fortnight: 95% of required CRR
balance
76. KYC data to be updated – High Risk – once in 2 years; Medium risk – once in 8 years; Low risk –
once in 10 years.
77. Interest Rates on FCNR (B) Deposits (January 31, 2014): The interest rate ceiling on
FCNR (B) deposits with effect from March 1, 2014 will be as under: (a) 1 year to less
than 3 years: LIBOR/Swap plus 200 basis points; (b) 3 - 5 years: LIBOR/Swap plus 300
basis points
78. Small Banks: Objectives: To further financial inclusion; Capital requirement: The minimum paid-
up equity capital - Rs. 100 crore; Minimum capital adequacy ratio -15%; PS target - 75% of
ANBC.
79. Payment Banks: (a) Objectives: financial inclusion; Scope of activities: Acceptance of demand
deposits, i.e., current deposits, and savings bank deposits; No NRI deposits should be accepted.
Maximum balance of Rs. 100,000 per individual customer. Capital requirement: Minimum paid-up
equity capital - Rs. 100 crore. Capital adequacy ratio - minimum 15% of RWA. Loans: Not allowed
by payment banks.
80. Reporting to Central Repository of Information on Large Credits (CRILC) (May 22, 2014):
RBI has set up the CRILC to collect, store and disseminate data on all borrowers' credit exposures
including Special Mention Accounts (SMA 0, 1 & 2) having aggregate fund-based and non-fund
based exposure of Rs.50 million and above.

IMPORTANT QUESTIONS BASED ON RBI GUIDELINES

VARIOUS RATES AT GLANCE
Bank Rate 7.00% 05.04.2016
CRR 4.00% 09.02.2013
SLR 21.25% 02.04.2016
Repo Rate 6.50% 05.04.2016
Reverse Repo Rate 6.00% 05.04.2016
MSF Rate 7.00% 05.04.2016
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 236 | P a g e
 Sovereign Gold Bonds, 2015-16
1. Issuance: Bonds will be issued by Reserve Bank India on behalf of the Government of India.
2. Denomination: The Bonds shall be denominated in units of one gram of gold and multiples thereof.
3. Minimum size: Minimum permissible investment will be 2 units (i.e. 2 grams of gold).
4. Maximum limit: The maximum amount subscribed by an entity will not be more than 500 grams
per person per fiscal year (April-March). A self-declaration to this effect will be
obtained.
5. Issue Price: Price of the Bonds shall be fixed in Indian Rupees on the basis of the previous week’s
(Monday – Friday) simple average closing price for gold of 999 purity, published by the
India Bullion and Jewellers Association Ltd. (IBJA).
6. Interest: The Bonds shall bear interest at the rate of 2.75 per cent (fixed rate) per annum on the
amount of initial investment. Interest shall be paid in half-yearly rests.
7. Redemption: The Bonds shall be repayable on the expiration of eight years from the date of issue. Pre-
mature redemption of the Bond is allowed from fifth year of the date of issue. The
redemption price shall be fixed in Indian Rupees on the basis of the previous week’s
(Monday – Friday) simple average closing price for gold of 999 purity, published by IBJA.
GOLD MONETISATION SCHEME, 2015
1.Objective: to mobilise gold held by households and institutions of the country and facilitate its use
for productive purposes, and in the long run, to reduce country’s reliance on the import of gold.
2. Medium and Long Term Government Deposit (MLTGD) - medium term period of 5-7 years; long term
period of 12-15 years
3. Short Term Bank Deposit (STBD) - short term period of 1-3 years.
4. Acceptance of deposits: The minimum deposit at any one time shall be raw gold (bars, coins, jewellery
excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. There
is no maximum limit for deposit under the scheme.
5. Short Term Bank Deposit (STBD): The deposit will be made with the designated banks for a short
term period of 1-3 years and will be treated as their on-balance sheet liability.
6. Medium and Long Term Government Deposit (MLTGD): The deposit under this category will be
accepted by the designated banks on behalf of the Central Government.
7. Interest Rate: On short term deposit – as per Bank discretion. On
medium term deposit – 2.25%; On long term deposit –
2.5% ATAL PENSION YOJANA (APY)
1. Focus of APY: The APY will be focussed on all citizens in the unorganised sector
2. Under the APY, guaranteed minimum pension of Rs. 1,000/-, 2,000/-, 3,000/-, 4,000 and 5,000/-
per month will be given at the age of 60 years depending on the contributions by
the subscribers.
3. Benefit in joining APY scheme & Govt contribution: In APY, Central Government will co-contribute 50% of
the total contribution or Rs. 1,000/- p.a., whichever is lower, to the eligible APY account
holders who join the scheme during the period 1st June, 2015 to 31st March 2016. The
Government co contribution will be given for 5 years from FY 2015-16 to 2019-20.
4. Eligibility for APY: The age of the subscriber should be between 18 - 40 years. He / She should have
a savings bank account.
5. Age of joining and contribution period: The minimum age of joining APY is 18 years and maximum
age is 40 years. The age
of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the
subscriber under APY would
be 20 years or more.
PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA
Nature of the scheme: The scheme will be a one year cover Term Life Insurance Scheme, renewable
from year to year, offering
life insurance cover for death due to any reason.
Scope of coverage: All savings bank account holders in the age 18 to 50 years.
Enrolment Modality: The cover shall be for the one year period stretching from 1st June to 31st May.
Benefits: Rs.2 lakhs is payable on member’s death due to any reason.
Premium: The premium payable is Rs.330/- per annum per subscriber.
Eligibility Conditions: All savings bank account holders in the age 18 to 50 years
Termination of assurance: On attaining age 55 years (age near birth day) subject to annual renewal
up to that date (entry,
however, will not be possible beyond the age of 50 years).
Administration: The scheme will be administered by LIC or any other Life Insurance company
PRADHAN MANTRI SURAKSHA BIMA YOJANA
Nature of the scheme: The scheme will be a one year cover Personal Accident Insurance Scheme,
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 renewable from year to year,
offering protection against death or disability due to accident.
Benefits under the scheme: Death or permanent disability: Rs 2 lakh; partial disability: Rs 1 lakh
Premium payable: Rs.12/- per annum per member.
Administration of the Scheme: The scheme would be offered / administered through the Public
Sector General Insurance
Companies (PSGICs) and other General Insurance companies.
Eligibility: All savings bank account holders aged between 18 years (completed) and 70 years (age
nearer birthday).
Enrolment period and modality: The cover shall be for the one year period stretching from 1st June to
31st May.
MUDRA BANK
1. Mudra Bank stands for Micro Units Development Refinance Agency (MUDRA).
2. MUDRA Bank was announced by the Finance Minister Arun Jaitley in his FY 15-16 Budget speech.
3. Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector financial
institution.
4. Major Product Offerings: Shishu: The loan cover in this stage will be upto Rs 50,000; Kishor: In
this stage, the entreprenuer will be eligible for a loan ranging from Rs 50,000 to Rs 5 lakh;
Tarun: This last and final category will provide loans for upto Rs 10 lakh.
5. Corpus: The Bank will be set up with a corpus of Rs 20,000 crore and a credit guarantee
fund of Rs 3,000 crore.
PRADHAN MANTRI FASAL BIMA YO]ANA (PMFBY)
1. OBJECTIVES: To provide insurance coverage and financial support to the farmers in the event of
failure of any of the notified crop as a result of natural calamities, pests & diseases.
2. IMPLEMENTING AGENCY (IA): Agriculture Insurance Company of India(AIC) and some private
insurance companies like ICICI-Lombard General Insurance Company Ltd and others
3. CROPS AND NOTIFIED AREA: The Scheme can cover all the Crops for which past yield data is
available and grown during the notified season, in a Notified Area.
4. FARMERS TO BE COVERED: The enrolment under the scheme, shall be compulsory for Loanee
Farmers and voluntary coverage may be obtained by all other farmers.
5. RISKS TO BE COVERED: (i) Natural Fire and Lightning; (ii) Storm, Hailstorm, Cyclone, Typhoon,
Tempest, Hurricane, Tornado etc; (iii) Flood, Inundation and Landslide; (iv) Drought, Dry spells;
(v) Pests/ Diseases etc. as also Loss / damage resulting from occurrence of identified localized
risks i.e. hailstorm, landslide, and Inundation affecting isolated farms in the notified area.
6. Risk not covered: War & kindred perils, nuclear risks, riots, malicious damage, theft, act of
enmity, grazed and/or destroyed by domestic and/or wild animals, are not covered.
7. SUM INSURED / LIMIT OF COVERAGE: In case of Loanee farmers under Compulsory Component,
the Sum Insured would be equal to Scale of Finance for that crop as fixed by District Level
Technical Committee (DLTC) which may extend up to the value of the threshold yield of the
insured crop at the option of insured farmer. For farmers covered on voluntary basis the sum-
insured is upto the value of Threshold yield i.e threshold yield x (MSP or gate price) of the insured
crop.
8. PREMIUM RATES:
1 Kharif: 2.0% of SI or Actuarial rate, whichever is less
2 Rabi: 1.5% of SI or Actuarial rate, whichever is less
3 Annual Commercial / Annual Horticultural crops: 5% of SI or Actuarial rate, whichever is less
]AN DHAN YO]NA – BENEFITS UNDER SCHEME
1. Life Insurance Cover: Rs 30,000
2. General Insurance Cover: Rs 100,000
3. Overdraft facility: Rs 5000 if account operated for last 6 months

1. Revision of interest rates for Small Savings Schemes: Rate of interest on various small
savings schemes for the financial year 2016-17 are given below:
Scheme w.e.f. 01.04.2016 to
5 year SCSS, 2004 8.6% p.a
PPF, 1968 8.1% p.a
Kisan Vikas Patra 7.8% p.a
Sukanya Samriddhi Account 8.6% p.a
2. Import of Rough, Cut and Polished Diamonds (March 31, 2016): Banks are permitted to
approve Clean Credit i.e. credit given by a foreign supplier to its Indian customer / buyer,
without any Letter of Credit (Suppliers' Credit) / Letter of Undertaking (Buyers' Credit) / Fixed
Deposits from any Indian financial institution for import of Rough, Cut and Polished Diamonds,

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 for a period not exceeding 180 days from the date of shipment. Now, RBI has delegated this
power for a period exceeding 180 days from the date of shipment to the AD banks.
3. Monetisation Scheme, 2015 - Amendments (March 31, 2016): In the case of MLTGD, the
redemption of principal at maturity shall, at the option of the depositor, be either in Indian
Rupee equivalent of the value of deposited gold at the time of redemption, or in gold. Where the
redemption of the deposit is in gold, an administrative charge at a rate of 0.2% of the notional
redemption amount in terms of INR shall be collected from the depositor. However, the interest
accrued on MLTGD shall be calculated with reference to the value of gold in terms of Indian
Rupees at the time of deposit and will be paid only in cash.

4. Review of FDI policy –Insurance sector (March 31, 2016): The limit of foreign investment in
insurance sector (Insurance Company; Insurance Brokers; Third Party Administrators; Surveyors
and Loss Assessors; Other Insurance Intermediaries has been enhanced from 26 to 49 percent
under the automatic route.
5. Diamond Dollar Account (DDA) (March 23, 2016): RBI has dispensed with following
statements - quarterly reports giving details of the name and address of the firm/company in
whose name the Diamond Dollar Account is opened, fortnightly statements giving data on DDA
balances
6. Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure
Standards (March 23, 2016): In addition to the assets prescribed under Level 2B, with effect
from February 1, 2016, Corporate debt securities (including commercial paper) can also be
reckoned as Level 2B HQLAs, subject to a 50% haircut.
7. Pradhan Mantri Fasal Bima Yojana (March 17, 2016): Pradhan Mantri Fasal Bima Yojana
(PMFBY) would replace the existing schemes of National Agricultural Insurance Scheme (NAIS) &
Modified National Agricultural Insurance Scheme (MNAIS) from Kharif 2016. Premium rates will
be maximum upto 1.5% for Rabi and upto 2% for Kharif for Food crops, Pulses and Oilseeds and
upto 5% for Annual Horticulture/ Commercial Crops.
8. Revised Framework for Revival and Rehabilitation of Micro, Small and Medium
Enterprises (MSMEs) (March 17, 2016): Framework to be operationalized by June 30, 2016. The
revival and rehabilitation of MSMEs having loan limits up to Rs.25 crore will be as per revised
framework and with exposure of above Rs.25 crore will continue to be governed by the CDR/ Joint
Lenders’ Forum (JLF) mechanism. Banks should report credit information and SMA status of all
accounts above the cut-off exposure of Rs.5 crore and above to the Central Repository for
Information on Large Credit (CRILC). The branch maintaining the account should forward the
account to the Committee for CAP reported as SMA-2 and consider forwarding other stressed
accounts with aggregate loan limits above Rs.10 lakh to the Committee for stressed Micro, Small
and Medium enterprises within five working days for a suitable corrective action plan (CAP).
Accounts with aggregate loan limits up to Rs.10 lakh identified as SMA-2 should be mandatorily
examined for CAP by the branch itself. Any MSME borrower may voluntarily initiate proceedings if
there is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth
during the previous accounting year.
9. NEFT – Customer Service and Charges (March 17, 2016): Banks were required to submit
data pertaining to NEFT transactions by walk-in customers on a quarterly basis starting from
quarter ended March 31, 2014. RBI has now discontinued the submission of this report.
10. Grant of EDF Waiver for Export of Goods Free of Cost (March 03, 2016): GR waiver to
exporters for export of goods free of cost is available. Status Holders shall be entitled to export
freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs
10 lakh or 2% of average annual export realization during preceding three licensing years
whichever is lower.
11. Basel III Capital Regulations – Revision (March 1, 2016): Revaluation reserves arising from
change in the carrying amount of a bank’s property consequent upon its revaluation would be
considered as common equity tier 1 capital (CET1) instead of Tier 2 capital as hitherto. These
would continue to be reckoned at a discount of 55 per cent.
12. RBI clarifications on MCLR System: 1. Fixed Rate Loans: Fixed rate loans upto three years
shall be priced with reference to MCLR. Fixed rate loans of tenor above three years will continue
to be exempted from MCLR system;
13. Designated Trade Repository: The Clearing Corporation of India Limited (CCIL) shall be the
designated trade repository for the OTC interest rate and foreign exchange contracts as
mandated by the RBI from time to time.
14. Ways & Means Advances: The limit for Ways and Means Advances (WMA) for the first half of
the financial year 2016-17 (April 2016 - September 2016) will be Rs 50,000 crore.
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15. Revitalising Stressed Assets in the Economy (February 25, 2016): Strategic Debt
Restructuring (SDR) Scheme: The Strategic Debt Restructuring (SDR) has been introduced with
a view to ensuring more stake of promoters in reviving stressed accounts and providing banks
with enhanced capabilities to initiate change of ownership, where necessary, in accounts which
fail to achieve the agreed critical conditions and viability milestones. In case of divestment of
banks’ holding in favour of a ‘new promoter’, the asset classification benefit will be available
provided banks divest a minimum of 26% of the shares of the company (and not necessarily
51% ab initio as required hitherto) to the new promoters within the stipulated time line of 18
months. Joint Lenders’ Forum Empowered Group (JLF – EG): The decisions on the Corrective
Action Plan (CAP) must be approved by a minimum of 75% of creditors by value and 50% of
creditors by number in the JLF.
16. Point of Presence (PoP) Services under Pension Fund Regulatory and Development
Authority for National Pension System (NPS) (February 18, 2016): NBFCs shall not
undertake Point of Presence (PoP) services for National Pension System under Pension Fund
Regulatory and Development Authority for National Pension System.
17. Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments
(February 11, 2016): A start-up in India with an overseas subsidiary is permitted to open foreign
currency account abroad to pool the foreign exchange earnings out of the exports/sales made by
the concerned start-up. The balances in the said foreign currency account as due to the Indian
start-up should be repatriated to India within a period as applicable to realisation of export
proceeds (currently nine months). A start-up is also permitted to avail of the facility for realizing
the receivables of its overseas subsidiary or making the above repatriation through Online
Payment Gateway Service Providers (OPGSPs) for value not exceeding USD 10,000 (US Dollar
ten thousand) or up to such limit as may be permitted by RBI from time to time under this
facility.

18. Implementation of Indian Accounting Standards (Ind AS) (February 11, 2016): Commercial
banks (excluding RRBs) shall follow the Indian Accounting Standards as notified under the
Companies (Indian Accounting Standards) Rules, 2015, in the following manner – (a) Banks shall
comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting
periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31,
2018 or thereafter.
19. Post Office (Postal Orders/Money Orders), 2015 (February 04, 2016): General permission
has been given to any person to buy foreign exchange from any post office in India in the form
of postal order or money order.
20. RTGS service charges for members and customers (February 4, 2016): Processing charge
per transaction: Every outward transaction will attract flat processing charge at the earlier cap of
Rs0.50 (exclusive of service tax) and a time varying charge as under:
Time of Settlement at RBI Time varying charge per
Srno outward
From To
. transaction
1 08:00 hours 11:00 hours Nil
2 After 11:00 13:00 hours Rs 2.00
3 After 13:00 16:30 hours Rs 5.00
4 After 16:30 Rs 10.00
21. RTGS: Customer Charges: The maximum charges that can be recovered by a member (if it so
desires) from its customers will remain unchanged as under. Customers should not be charged
for inward transaction, as hitherto. The revised service charge
22. Provision of Safe Deposit Locker facility by NBFCs (January 28, 2016): Providing safe deposit
locker facility is a fee based service and shall not be reckoned as part of the financial business
carried out by NBFCs. NBFCs offering safe deposit locker facility or intending to offer it, shall
disclose to their customers that the activity is not regulated by the Bank.
23. Acceptance of cheques bearing a date as per National Calendar (Saka Samvat) for
payment (January 21, 2016): A cheque written in Hindi and bearing a date in Hindi is a valid
instrument. Banks should accept cheques bearing a date as per National Calendar (Saka Samvat)
for payment, if otherwise found in order. Banks should ascertain the Gregorian calendar date
corresponding to the National Saka calendar in order to avoid payment of stale cheques.
24. Sale of India Gold Coin (IGC) (January 21, 2016): MMTC has been authorized by the Central
Government to manufacture India Gold Coins (IGC) with Ashok Chakra and supply these coins to
the domestic market. The gold used for the IGC will be only that mobilized domestically under
the existing Gold Deposit Scheme (GDS) and Gold Monetization Scheme (GMS). Designated

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 240 | P a g e
 banks can sell the IGCs minted by MMTC. However, the current restriction on selling of imported
gold coin by the banks will continue.
25. Incentive for improving service to non-chest branches under Linkage Scheme (January
21, 2016): The currency chest holding banks allowed to enhance the service charges to be levied
on cash deposited by non-chest bank branches from the existing rate of Rs 2/- per packet of 100
pieces to Rs 5/- per packet. These instructions come into effect from February 1, 2016.
26. Payment of Agency Commission on pension accounts (January 21, 2016): Commission is
paid at Rs. 65 per transaction for handling pension computation, payment and related services on
behalf of Central and State Governments. Number of commisionable transactions for payment of
agency commission on account of pension in a year should not exceed 14. In case any Central
Government Department or State Governments compute the pension figures on their own and
pass them on to banks for payment, such transactions may be included under non-pension
payments, on which agency commission is payable on a turnover basis as per the existing norms
(currently at 5.5 paise per Rs. 100/-).
27. Fraud Reporting and Monitoring (January 21, 2016): 1. Revision of limits in reporting of
Fraud Cases: Frauds of Rs 0.1 million (Rs 1 lac) and above but below Rs 50 million (Rs 5 crore)
will be monitored by the Regional Office of RBI. Frauds of Rs 50 million (Rs 5 crore) and above
will be monitored by CFMC, Bengaluru as against the present limit of Rs 10 million (Rs 1 crore)
and above. Banks/FIs need not send the hard copies of the FMR-1 returns. Instead a monthly
certificate should be submitted to the effect that soft copy of all the frauds of Rs 0.1 million and
above, to be reported to the RBI in a month, has been sent to email.
28. Credit information reporting in respect of Self Help Group (SHG) members (January 14,
2016): Structure of credit information collection and reporting: 1. Information to be collected by
banks from individual SHG members where the total amount of loan to be attributed to or to be
availed by the SHG member exceeds Rs.30,000/- (Table 1); upto Rs.30,000/
(Table 2); Information on all individual SHG members to be reported by banks to CICs (Table 3): 4.
Information on individual SHG members to be collected by banks at the time of opening of new Savings
Bank Accounts of the SHG. (Table 4). Banks shall collect information from all SHG members in Tables 1
and 2 and report it to the CICs in Table 3. The collection and reporting of credit information in respect of
SHG members will be restricted to the members of those SHGs
that take bank loans exceeding Rs. 1,00,000/-. Credit information requirements for SHG members
having a share above Rs.30,000 or more in the SHG loan is more detailed than that in respect of those
upto Rs.30,000. Banks have the option to collect and report the SHG member level data either
themselves or by outsourcing it to other entities. Banks must put in place appropriate controls to ensure
the correctness of the data submitted by the entities to which it is outsourced. Banks shall collect
detailed information from SHG members availing of loans exceeding a lower threshold of Rs.20,000, if
the gross NPA in the SHG segment exceeds 10% or is higher than the total gross NPA of the bank by 5
percentage points.
29. Direct Benefit Transfer (DBT) Scheme – Seeding of Aadhaar in Bank Accounts: (January
14, 2016): RBI has advised that in view of the Hon’ble Supreme Court of India’s interim orders
dated August 11, 2015 and October 15, 2015 on usages of Aadhaar, use of Aadhaar Card and
seeding of bank accounts with Aadhaar numbers is purely voluntary and it is not mandatory.
30. Discontinuation of the requirement for Paper to Follow (P2F) for Central Government
cheques under Cheque Truncation System (December 31, 2015): RBI in consultation with the
Office of the Controller General of Accounts (CGA), Ministry of Finance, has decided to dispense with
the current requirement of forwarding the paid Central Government cheques in physical form
(commonly known as P2F) to the Government departments. The government cheques would
henceforth be paid in CTS clearing solely based on their electronic images. The paid cheques in
physical form would be retained by the presenting bank. The presenting banks are required to
preserve the physical instruments in their custody securely for a period of 10 years. Drawee banks
shall preserve the images of all government cheques for a period of 10 years with themselves or
through the National Archival System of National Payments Corporation of India (NPCI).
31. Roadmap for opening brick and mortar branches in villages with population more than
5000 without a bank branch of a scheduled commercial bank (December 31, 2015): SLBC
Convenor banks should identify villages with population above 5000 without a bank branch of a
scheduled commercial bank in their State. The identified villages may be allotted among
scheduled commercial banks (including Regional Rural Banks) for opening of branches. The
opening of bank branches under this Roadmap should be completed by March 31, 2017.
32. Withdrawal of all old series of Banknotes issued prior to 2005 (December 23, 2015): RBI
has decided to extend the date for exchanging the pre-2005 banknotes to June 30, 2016.
33. Interest Rates on Advances (December 17, 2015): i) Internal Benchmark: All rupee loans
sanctioned and credit limits renewed w.e.f. April 1, 2016 will be priced with reference to the
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 241 | P a g e
 Marginal Cost of Funds based Lending Rate (MCLR). (ii) The MCLR will comprise of: (a) Marginal
cost of funds; (b) Negative carry on account of CRR; (c) Operating costs; (d) Tenor premium; (iii)
Marginal Cost of funds will comprise of Marginal cost of borrowings and return on net worth; (vii)
Spread: All banks shall adopt the following broad components of spread: a). Business strategy; b)
Credit risk premium; (viii) Interest Rates on Loans: Actual lending rates will be determined by
adding the components of spread to the MCLR; ix) Exemptions from MCLR: a). Loans covered by
schemes specially formulated by Government of India wherein banks have to charge interest rates
as per the scheme; b). Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL), etc.
granted as part of the rectification/restructuring package; c). Loans granted under various refinance
schemes formulated by Government of India; (d) Advances to banks’ depositors against their own
deposits; (e) Advances to banks’ own employees including retired employees; (f) Advances granted
to the Chief Executive Officer / Whole Time Directors; (g) Loans linked to a market determined
external benchmark; (h) Fixed rate loans granted by banks. x) Review of MCLR: Banks shall
review and publish their Marginal Cost of Funds based Lending Rate (MCLR) of different maturities
every month on a pre-announced date with the approval of the Board or any other committee to
which powers have been delegated. xi) (b) Weightage of Marginal cost of borrowings: Marginal cost
of borrowing shall have a weightage of 92% of Marginal Cost of Funds while return on net worth will
have the balance weightage of 8%; (c) Return on net worth: The weightage
given for this component in the marginal cost of funds will be 8%. (d)Marginal cost of funds =
92% x Marginal
cost of borrowings + 8% x Return on net worth
34. Maintenance of Statutory Liquidity Ratio (SLR) (December 10, 2015): RBI has decided to
reduce the Statutory Liquidity Ratio (SLR) from 21.5 per cent of their Net Demand and Time
Liabilities (NDTL) to: (i) 21.25% from April 2, 2016; (ii) 21.00 per cent from July 9, 2016; (iii)
20.75 per cent from October 1, 2016; and (iv) 20.50% from January 7, 2017.
35. Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit (December 4,
2015): The scheme is effective from April 1, 2015. (a) The rate of interest equalisation would be 3
percent and will be available on Pre Shipment Rupee Export Credit and Post Shipment Rupee Export
Credit; (b) The scheme would be applicable w.e.f 01.04.2015 for 5 years. (c) The scheme will be
available to all exports under 416 tariff lines [at ITC (HS) code of 4 digit] and exports made by
Micro, Small & Medium Enterprises (MSMEs) across all ITC(HS) codes; (d) Scheme would not be
available to merchant exporters; (e) A study may be initiated on the impact of the scheme on
export promotion on completion of 3 years of the operation of the scheme. The study may be done
through one of the IIMs.
36. Engagement of Services of Expatriate Officers in Indian Offices of Foreign Banks
(November 26, 2015): A foreign bank can deploy a maximum of four expatriates for each branch
opened in India and not more than six expatriates for their Head Office functions.
37. Micro Finance Institutions (NBFC-MFIs) (November 26, 2015): As per revised guidelines,
Micro finance Institutions can grant loans up to Rs 30000 for loans with tenure not less than 24
months.
40. Priority Sector Lending – Targets and Classification (November 18, 2015): RBI has advised
banks to ensure that their overall direct lending to non-corporate farmers does not fall below the
system-wide average of the last three years achievement failing which they will attract the usual
penalties for shortfall. For FY 2015-16, the applicable system wide average figures for computing
achievements under priority sector lending will be 11.57 percent.
41. RBI grants ‘in-principle’ approval to NPCI to function as the central unit for Bharat Bill
Payment Systems (BBPS): The Bharat Bill Payment System (BBPS), an integrated bill
payment system, will function as a tiered structure for operating the bill payment system in the
country with a single brand image providing convenience of ‘anytime anywhere’ bill payment to
customers.
42. RBI grants “in-principle” approval to three applicants for setting up Trade Receivables
Discounting System (TReDS): NSE Strategic Investment Corporation Limited (NSICL) and
Small Industries Development Bank of India (SIDBI), Mumbai; Axis Bank Limited, Mumbai; Mynd
Solutions Pvt. Ltd., Gurgaon, Haryana
43. KYC - ‘Officially Valid Documents’ - Change in name on account of marriage (October 29,
2015): A document shall be deemed to an “officially valid document” even if there is a change in
the name subsequent to its issuance, provided it is supported by a marriage certificate issued by
the State Government or a Gazette notification, indicating such a change of name. Banks may
accept a copy of marriage certificate issued by the State Government or Gazette notification
indicating change in name together with a certified copy of the ‘officially valid document’ in the
existing name of the person while establishing an account based relationship or while undergoing
periodic updation exercise.
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 242 | P a g e
44. Risk Weights for Claims on Foreign Central Banks (October 8, 2015): Risk weights in
respect of claims on foreign central banks will be risk weighted in a manner similar to claims on
foreign sovereigns. Therefore, claims on foreign sovereigns and their central banks will attract
risk weights as per the rating assigned to those sovereigns and central banks/ sovereign and
central bank claims, by international rating agencies as follows:
Table 2 : Claims on Foreign Sovereigns/Central Banks – Risk Weights
S&P*/Fitch Ratings AAA to AA A BBB BB to B Below B Unrated
Moody’s ratings Aaa to Aa A Baa Ba to B Below B Unrated
Risk Weight (%) 0 20 50 100 150 100
45. INDIVIDUAL HOUSING :
Risk
Category of loan LTV ratio
Weight
Upto - 30 lakh (%)
<_ 80 35
> 80 and 90 50
Above - 30 lakh and upto - <_ 75 35
lakh > 75 and 80 50
Above - 75 lakh <_ 75 75
46. RBI to issue Rs 50 Banknotes with Inset 'R' and Numerals in Ascending Size: RBI will
issue banknotes in Rs 50 denomination in Mahatma Gandhi Series - 2005, with the numerals in
both the number panels in ascending size from left to right while the first three alpha-numeric
characters(prefix) will remain constant in size. The Reserve Bank has already issued banknotes
with ascending size of numerals in the number panels in Rs 100, Rs 500, and Rs 1000
denominations.
47. Banknotes with new numbering pattern and special features for the visually impaired
(September 24, 2015): RBI will shortly put into circulation banknotes in the denominations of Rs
100, Rs 500 and Rs 1000 incorporating three new/revised features - (i) ascending size of numerals
in the number panels, (ii) bleed lines, and (iii) enlarged identification mark. The current banknotes
will be without inset letter in the number panels. Numerals in both the numbering panels of
banknotes will be in ascending size from left to right, while the first three alphanumeric characters
(prefix) remain constant in size. Printing the numerals in ascending size is a visible security feature
in the banknotes so that the general public can easily distinguish a counterfeit note from a genuine
one. The banknotes of Rs 100 denomination will have four bleed lines, Rs 500 denomination will
have five angular bleed lines in three sets of 2-1-2 lines on the obverse in both, the upper left and
the right hand edge of the banknote. Similarly, Rs 1000 banknotes will have six angular bleed lines
in four sets of 1-2-2-1 lines on the obverse in both, the upper left and right hand edge of the
banknotes. These will facilitate identification of these notes by visually impaired persons. The
existing identification mark (circular-shape in Rs 500 and diamond in Rs 1000) near the left edge of
the banknote has been enlarged by 50%.
48. Timing for RTGS: Customer's transactions from 8.00 hours to 16.30 hours on week days and
working Saturdays. For inter-bank transactions, the service window is available from 8.00 hours
to 20.00 hours on week days and working Saturdays. RTGS will not be operated on second and
fourth Saturdays.
49. The RTGS time window with effect from September 1, 2015 will be as under:
S. N. Time Event Time
1. Open for Business 08:00 hours
2. Initial Cut-off (Customer 16:30 hours
3. Final Cut-off (Inter-bank 19:45 hours
4. IDL Reversal 19:45 hours - 20:00 hours
5. End of Day 20:00 hours

50. Cash Withdrawal at Point-of-Sale (POS) – (August 27, 2015): RBI had allowed bank
customers, to withdraw cash at POS terminals upto Rs 1000 per day against all debit cards issued
in India and open system prepaid payment instruments (PPIs) issued by banks in India. Now, RBI
has enhanced the limit for cash withdrawal at POS (for debit cards and open system prepaid cards
issued by banks in India) from Rs.1000/- to Rs.2000/- per day in Tier III to VI centres. The per-day
limit in Tier I and II centres remains unchanged. Customer charges, if any, levied on cash
withdrawals shall not exceed 1% of the transaction amount at all centres irrespective of the limit of
Rs 1000 / Rs 2000.
51. Detection of Counterfeit Notes (August 27, 2015): RBI has now revised these guidelines with
effect from 27 August 2015 which are given below: (a) Detection over the counter: Banknotes
tendered over the counter should be examined for authenticity through machines and such of
these determined as a counterfeit one, shall be stamped as "COUNTERFEIT NOTE" and impounded.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 243 | P a g e
 Each such impounded note shall be recorded under authentication, in a separate register. The size
of the stamp should be uniformly 5 cm x 5 cm with the following inscription – “COUNTERFEIT
BANKNOTE IMPOUNDED” with bank and branch name, signature and date; (b) Detection from Bulk
Receipts at Back Office / Currency Chest: The same procedure as used for detection over the
counter is to be followed where notes are received directly at the back office / currency chest
through bulk tenders; (c) Acknowledgement to tenderer: When a banknote tendered at the
counter of a bank branch or treasury is found to be counterfeit, an acknowledgement receipt must
be issued to the tenderer, after stamping the note. The receipt, in running serial numbers, should
be authenticated by the cashier and tenderer. Notice to this effect should be displayed prominently
at the offices / branches for information of the public. The receipt is to be issued even in cases
where the tenderer is unwilling to countersign it; (d) Credit to customer’s account: No credit to
customer’s account is to be given for counterfeit notes, if any, in the tender received over the
counter or at the back-office / currency chest; (e) Penalty: Penalty at 100% of the notional value
of counterfeit notes, in addition to the recovery of loss to the extent of the notional value of such
notes, will be imposed under the following circumstances: (a) When counterfeit notes are detected
in the soiled note remittance of the bank; (b) If counterfeit notes are detected in the currency
chest balance of a bank during Inspection / Audit by RBI; (f) Reporting to Police and other bodies:
A counterfeit note detected in the cash received by the bank branch/Treasury, across the counter
shall be impounded as stated above. Thereafter, the following procedure should be followed while
reporting incidence of detection of counterfeit note to the Police: (i) For cases of detection of
counterfeit notes upto 4 pieces, in a single transaction, a consolidated report should be sent by the
Nodal Bank Officer to the police or the Nodal Police Station, along with the suspect counterfeit
notes, at the end of the month; (ii) For cases of detection of counterfeit notes of 5 or more pieces,
in a single transaction, the counterfeit notes should be forwarded by the Nodal Bank Officer to the
local police authorities or the Nodal Police Station for investigation by filing FIR. Acknowledgement
of the police authorities concerned has to be obtained for note/s forwarded to them both as
consolidated monthly statement and FIR.
52. RBI grants “in-principle” approval to 11 Applicants for Payments Banks: Aditya Birla
Nuvo Limited; Airtel M Commerce Services Limited; Cholamandalam Distribution Services
Limited; Department of Posts; Fino PayTech Limited; National Securities Depository Limited;
Reliance Industries Limited; Shri Dilip Shantilal Shanghvi; Shri Vijay Shekhar Sharma; Tech
Mahindra Limited; Vodafone m-pesa Limited
53. CGSMSE – Change in Annual Guarantee Fee: The Credit Guarantee Fund Trust presently
charges uniform guarantee fees from all banks without reference to the level of NPAs reported by
the banks. Now, the Trust has decided to charge differential rates of AGF, depending upon the
NPA levels reported by the banks as per rates given below. The proposed revision will be
effective for Guarantees approved by the Trust on or after October 01, 2015.
S.N Annual Service Fee (ASF)/Annual Guarantee Fee (AGF)
o NPA level of the MLI (%) ASF/AGF (%)
1 Above 20% SR + 100 bps
2 15% - 20% SR + 50 bps
3 12% - 15% SR + 25 bps
4 12% and below SR
5 Below 6% SR - 25 bps @
1. SR = Standard Rate (Existing ASF/AGF
16. Interest Rate Cap under Credit Guarantee Scheme (CGS) of CGTMSE (July 15, 2015): for
coverage of loans up to Rs 50 lakh under CGS, bank can charge maximum interest rate of Base
Rate plus 2% and for loans more than Rs 50 lakh, banks can charge maximum interest rate of
Base Rate plus 3%.
17. RBI constitutes a Committee on Medium-term Path on Financial Inclusion: RBI has
constituted a Committee with the objective of working out a medium-term (five year)
measurable action plan for financial inclusion. The Committee will be headed by Shri Deepak
Mohanty, Executive Director, Reserve Bank of India
18. Priority Sector Lending – Targets and Classification (July 16, 2015): Banks should ensure
that their overall direct lending to non-corporate farmers does not fall below the system-wide
average of the last three years achievement failing which they will attract the usual penalties for
shortfall. Banks should also continue to maintain all efforts to reach the level of 13.5% direct
lending to the beneficiaries who earlier constituted the direct agriculture sector.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 244 | P a g e
 15.MEMORY BASED RECALLED QUESTIONS
A. PROBATIONARY OFFICER CONFIRMATION TEST 2015-16

1) SARFAESI Act – All NPAs above Rs 1 Lakh

2) SWIFT : Society for Worldwide International Funds Transfer.
3) Card Linkage – CBS Menu
4) Security linkage in advances
5) For increase Liquidity in market reduce CRR
6) HL – Max age 75 yrs
7) PAN No 20% + 2% cess
8) NRI A/c – High Risk
9) Market regulator – SEBI
10)DRI Scheme – Annual Income Rural/Urban Rs. 24000/ Rs.18000
11)Repo rate – 6.50 %
12)MF – 2.5 Acre / 1 Hectre
13)Doctor’s Choice – 5cr = 50 mn
14)AOD – above 24M / 36M
15)CPGRS –
16)For FD – Photo not reqd – upto 10,000/-
17)FC – EEFC / FCNR / RFC
18)Cash payment – third party cheque – not reqd after office hours
19)Self – Rs 10,000/- after office hours
20)HL – for repairs & renovation – 80% & 75% project cost
21)PEP – Politically Exposed Person
22)HL – Appln – NF964
23)HL – maintainence & repairs & period – 30 yrs
24)Rate of Interest for more than 2 months CARD + 1%
25)CANARA CASH – Demand – 20 lakhs
26)SB Junior – CANARA – min 10 yrs of old
27)Mobile Banking
28)HNI – HL Min Gross Rs 25 Lakhs
29)PAN card – SAS verification Package
30)IOD – Inbuilt Overdraft
31)RTGS – Real Time Gross Settlement
32)Spl Asst – txn/CC – 1.5/0.50 L
33)BSBDA – Basic Savings Bank Deposit Account
34)Project Shikhar – BCG
35)TDS – CBS Menu – TDS03
36)RD Instalment CBS Menu – 1421
37)Security Linkage BAM74 – CHM56
38)Max no of persons in savings A/c – 4
39)NRI Housing loan – Max repayment age – 60 yrs
40)EMT Limitation – 12yrs
41)Low Risk Category – security inspection – 12M
42)DPN – Limitation – 3 yrs
43)EL limitation for abroad
44)EL upto 4 lacs – no margin
45)PMJDY – Max premium for 1 lacs – no premium
46)Doctor’s Choice
47)Canara Trade – 10 cr
48)SB – 20 Leaves per annum without charge
49)Stop Cheque payment – CHM35
50)Cash sell in CBS Menu – 9008
51)Branch batch closure – CBS Menu
52)NEFT charges Amt 1 – 2 lacs – Rs 15
53)Doubtful-I : 12 months
54)Canara premium A/c – no processing charges
55)Locker operations – Free of cost – 24 M
56)Mortgage – Transfer of Property Act
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 245 | P a g e
 57)Canara mortgage – 50% of the value property
58)Canara Rent – Actual rent receivable
59)Canara vehicle – min annual income – 3.00 lacs
60)Insurance – Indemnity
61)SB New A/c statement – upto 6 months – high risk
62)Image & signature CBS Menu – 7102
63)LIC Policy – Assignment
64)Tractor Loan Eligibility – Farmer – 6 Acre/12 acres
65)Malegaon committee – Micro finance credit
66)Micro credit – Amt upto Rs 1.00 lacs
67)SWL – 30 days overdue
68)Quick mortality – New NPA / 12 months / min limit 50 lacs and above
69)Staff can open CA A/c with premium for MIPD
70)Housing loan Max period 30 yrs
71)NRI Housing loan – 4 yr gross
72)EEFC A/c can be opened in $, GBP, CAD, AUD EURO)
73)CRR – 4.00%
74)No Interest on CRR kept with RBI
75)Business Development for Scale II – Rs 7000/-
76)Term Deposit – upto Rs 20,000/- cash withdrawal , Amt not remitted
77)RTGS timings – 8:00AM TO 16:30PM
78)No frills A/c – BSBDA
79)IOD – Inbuilt overdraft in PMJDY Rs 5000/-
80)Cheque payment – words not figures if differ
81)Cheque payment in due course – over the counter payment or cheque
82)Foreign exchange regulated under FEMA A/c
83)MUDRA
84)Service sector finance – 5 cr
85)EMT – Limitation – T2
86)SI – CHM31
87)Canara Satkar
88)Yuva Awas Rin – Max age upto 45 yrs
89)Canara Budget Security – coobligation
90)Gold loan appraisal above Rs 2 lakhs should be completed within 7 days
91)For Retail lending min score – 70% under ALPS
92)HL – Agreement – NF 981
93)Staff Meeting exps – Rs 20/-

B. PROBATIONARY OFFICER CONFIRMATION TEST 2015-16

(RECALLED QUESTIONS WITHOUT ANSWER)

1. What is the option to authorize signature linked to accounts-

2. In which option we open CA-
3. What is the website of our bank?
4. Which of the following term is related to Trading- asba/absa /abas / asab
5. Which of the accounts cannot open by minor -
6. Fund tr from one CASA to another CASA can be done in Fast path -
7. Which of the following is not a priority loan –
8. EDUCATION LOAN max sanctioning power at branch -
9. what is mandatory For issuing debit card -
10. Customer short name change takes place in fast path -
11. ATM provides the following facilities -
12. If PAN is not submitted what is the rate of TDS -
13. Mobile banking refers to -
14. Which is one of the example of Non Fund based Business-
15. What RKBY is -
16. ROI for SB -
17. CTS full form -
18. PAN contain how many characters -
19. Tenability period for loan against Life insurance policy -
20. What is CANARA MSME CAP min and max loan limit for Manufacturing -
21. what is margin for Agril. Loans upto Rs. 1.00 lacs -
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 246 | P a g e
22. What is income criteria for credit card classic -
23. Which of the following is example of term loan –
24. HL classified under priority is up to which limit under Metro & other than Metro -
25. Application received under govt sponsored schemes in warded in -
26. Loan repayment capacity will be assess under – CR/ TOR / NPV / DSCR / IRR
27. commission for Govt. business under pension payment -
28. SB transfer from one branch to another in fast path -
29. Rs. 30,000 - Insurance under PMJDY settled by - NPCI / GIC / HDFC ERGO /LIC
30. In Which Menu of FCR fast Path Risk categorization captured in -
31. Present base rate is -
32. Pay to Brij bhushan without liability on endorser is which kind of endorsement -
33. How many types of risk under KYC -
34. Mandatory target for priority sector for domestic banks –
35. Size of signature image –
36. Charge Loan against LIC Policy –
37. what type of charge in Gold Loans –
38. What is max card limit under SECURE CREDIT CARD -
39. MTR is applicable for -
40. Housing Loans , Which types of Charge on security –
41. Rate of Interest for DRI –
42. In CBS SYSTEMS –
43. what is meaning of ‘S” in CHM37 -
44. CA of partnership can be opened in fast path –
45. Which type of accounts are used for applying for IPO – SB / CA / ODCC/ASBA
46. What is Minimum amount to open PPF account -
47. What is interval of conducting Staff meetings – M/Q/H/Yl
48. RBIA stands for -
49. What is the name of Tax Saving Deposits Schemes under 80C -
50. Customer tender cheque for collection – what is the relation Customer & bank -
51. What is Age norms for Yuva Awas Rin -
52. What is the bank commission under Swalamban scheme -
53. Which account, Introduction is not mandatory -
54. What is max sanctioning power for Large branch under Canara budget scheme -
55. What is minimum balance required to open Current account in Rural & Metro -
56. What is RTGS timings on Saturday -
57. How may pillars for basel 2 -
58. Fast Path Menu for Teller batch closure –
59. Tenability of Canara Trade - 12m/ 15m /18m/24m/36m
60. What is the Validity period of cheque – 1m/2m/3m/6m
61. What is classification of Small hotel or tea shop – Priority Agril / Priority MSME mfg/ Priority MSME
SERVICE
62. Norms for NPA classification -
63. What is the minimum no. of Days the CBS System will prompt to change Password –
5d/6d/10d/30d
64. What is Reappraisal period of Gold loans above two 2 lacs - 7d/15d/10d/30d
65. Which day’s Founder day celebrated -
66. which option Duplicate Pass book –
67. What is the limit under Retail loans to send the Application for review to circle office-
2L/5L/6L/10L
68. What is Maximum installments in RD dhanvarsha -
69. Which of following is the example of negotiable instruments –
70. Legal amount in cheque stands for -
71. In Which CBS Menu customer is minor based on DOB* -
72. One Kilo Byte is equal to –
73. What is FULL form of ECS -
74. Which Statements will give net profit –
75. What is eligibility for JMG scale I travels in train-
76. How to authorize sign capture in FCR?
77. which option Atm card linked -
78. What is SB Power plus average balance -
79. what is the name of New pension scheme–
80. what is Present SLR -
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 247 | P a g e
81. what is Present CRR -
82. What is Maximum amount of Bank draft to be paid in cash -
83. what is the option in FCR to change Customer dormancy status -
84. what is full form of RTGS stand -
85. what is limit of cash Transaction where Pan must for -
86. what is Threshold in SB in metro is – 1L/2L/3L/4L/5L
87. what is Loan account opening option in CBS -
88. Annual Credit Plan of a branch is reported - LBR 1 / LBR 2/ LBR3 LBR 4
89. Whether printing of nomination is possible in Passbook-
90. The maximum amount guaranteed by CGTSME is ……….. and compulsory up to ……..
91. What is the Limitation for EMT – 5years / 10 years / 12 years / 30 years
92. What is ceiling of Max no lending banks in consortium – 10 /15 /50 /100 /no ceilings
93. In CBS Branches are connected to – HO / RBI / DIT /SERVER
94. What is target for Agriculture under Priority Sector-
95. What is the Penal Interest for delayed submission of stock statement?
96. Which of the following is an example of Material alteration -
97. What is the maximum transaction per day for Canara M- Wallet-
98. What is script magic-
99. What is the minimum amount to appeal to DRT-
100.What is rate of Interest for DRI loans –

CANARA BANK Clerical To officer EXAM DATED 23.04.2016

1. Housing loan risk weight above 75 lacs - 75%

2. Nomination in Proprietorship A/c - Permitted.
3. Limitation period of DPN – Three years
4. 10th Overseas presence by bank – Dubai
5. Investment limit for micro enterprises in Service Sector – Rs.10 lacs
6. FACTA Account with which country –USA
7. Maximum loan for Pension A/c – Rs.3.00 lacs (Staff – 4.00 lacs)
8. Maximum period for calculation of Pension A/c – 15 months (Staff – 20 months)
9. Payment in due course – See 10 of NI Act
10. Staff Welfare fund loans – Renewal in how many months – 11 months
11. OLIC Meeting – Quarterly interval
12. PRR-30 deals with Customer complaints
13. Lok adalat Amount – Rs.20 lacs.
14. In our bank customer complaint to be redressed within – 21 days.
15. Deferred payment guarantee – Outlay of funds/for fixed assets
16. Women beneficiary under weaker section – 5%
17. Bank Rate – 7%
18. Agricultural Advance under Priority Sector advances – 18% of AWBC/CEOBE whichever is
higher.
19. When Founders’ day celebrated in our bank – 19th November.
20. Return of cheque – N I Act Section 138.
21. In garnishee order bank-customer relationship – Debtor and Creditor.
22. OMBUDSMAN DECISION in How Many Months –
23. TDS applicable on how much amount – If interest income is Rs.10,000/- and more
24. Lost of cheque in clearing whose responsibility – Collecting banker
25. Vocational study course maximum amount – Rs.1.50 lacs.
26. How many house a NRI can buy in India – TWO but if third then CRE rate
27. Reply to RTI in how many days – within 30 days.
28. Who has recommended KCC – TM Bhashin Committee
29. FCNR calculation how many days in year is taken calculation – 360 days.
30. Why banks prefer to open a SB A/cs rather than TD – Low interest cost.
31. With whom recently our bank had on MOU so that their employee will get loan from branches
of all over India –BSNL
32. What is the contribution, maximum amount & Govt. can give in APY, Amount Rs.1000 or 50%
of the instalment.
33. What is the annual income of WES/LIC to be weaker section under priority – Rs.2.00 lacs.
34. Bank issue/Sales Manual fund as – to get non interest income.
35. Full form of CASA – Current Account and Savings Account.

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 248 | P a g e
 36. What is the amount which is kept as a security’s break open charges of locker rent – 3 years
rent.
37. DD purchaser cannot do what in case of DD – Stop payment of DD
38. Hindi day celebration – 14th September.
39. Official Language Act – 1963
40. Number of transaction in CANARA SARAL per annum – 4 X 12 = 48 transactions
41. In small Saving bank A/c – Total credit amount per month should not be more than Rs.1.00
lacs.
42. ATM hot listin g amount – Rs.150 + S T
43. Amount issue charges waived in EMV chips card Amount – Rs.250
44. Wrong debit in account by ATM – to be credited within SEVEN days (07 days)
45. Provisions for Standard Assets – 0.40% (Agricultural & SME – 0.25%)
46. What is the interest applicable in KCC after 2% interest subvention – 7%.
47. M icro manufacturing original investment in Plant & Machinery – Rs.25 lacs
48. What is the new category/ies in Agriculture under priority sector – Farm credit, Agricultural
infrastructure, Agriculture Ancilliary
49. What is limit for retaining foreign coins – No limit
50. How much foreign currency is allowed to carry while travelling other than Nepal and Bhutan -
$ 3000
51. Nomination facility is allowed in – Trust/Sole Proprietor/Pvt. Ltd company/None/All
52. Loan against goods as security – Pledge/Mortgage/Assignment/None
53. Death claim to be settled – within 15 days from receipt of application
54. Which new Curency is added in CANARA INTERNATIONAL TRAVEL CARD: SZD & AED
55. Purchase limit is for Canara Bank Platinum Card – Rs.2.00 lacs
56. Purchase limit for Canara Business Card
57. Loan per unit for construction of dwelling unit under priority sectior – Rs.10 lacs
58. What comes under liabilities in balance sheet – Prepaid expenses – Deposit/Advances
59. What is the purpose of Balance Sheet – To ascertain what is owned and owed.
60. Import bill realization – 270 days.
61. Counterfeit currency report to be prepare within how many days of detection –
62. KYC low risk – Fresh to be taken after 10 years
63. Nearest Police station to be informed if more than how many fake notres in account in a
month – 04
64. Cheque book not be issued in account if cheques above Rs.1 crore returned bow many times –
more than four times
65. Canara bank tied up for easy health with which company – Apollo Munich
66. RTGS minimum amount – Rs.2.00 lacs
67. Score to borrowings is under CIBIL
68. ATM hot listing charges – 150 + S T
69. Customer much lodge ATM complaint within how many days in case of wrong debit – 30 days
70. Rs.20,000/- and above DD amount should be A/c Payee
71. Whose transaction score is checked – CIBIL.
72. Minimum balance in CANARA Defence A/c – Rs.00 (NIL)
73. Surprise cash verification – Once in a quarter
74. Priority Sector Agricultural Loans given with 16 Kms radius
75. Talent bank scheme age – scale I/II/III/IV – 40/48/48/52 years
76. Farm Machinary Loans – Investment term loans in Agril.
77. Outstation cheques collection time – 7/10/14
78. Overdraft lmits in accounts of Pensions – 50% of Pension after 15 days of last pension credit.
79. Door to door banking for Pensioners minimum amount – Rs.5,000/-
80. Provision in N I Act 138 for processings. Take the amount &/or 2 years in imprisonment.
81. Rapo rate – 6.50%
82. World Credit Card limit – Min.Rs. 1.00 lacs toMax. Rs. 25.00 lacs
83. Duplicate DD to be issued within 15 days.
84. Duplicate DD can be given without identity letter – Rs.5,000/-
85. Loan limit against FCNR deposits – No limit
86. Education loan NPA recovery time upto 7.50 lacs date of expiry of scheme –31.12.2016
87. Counterfeit currency chest report – Periodicity
88. Branch level customer service committee meeting should done – Monthly
89. Risk and control self assistant module is ___
90. RBI discounts bill at RAPO rate – 6.00 %
91.LBA Medical Insurance on workmen and officers limit – Rs.3.00 lacs & 4.00 lacs
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 249 | P a g e
 92. New scheme on employee development Group 1 criteria – Amount Rs.6000/-
93 .Education loan priority criteria – Rs.10.00 lacs
94. Artison Credit card for priority limits – Rsw.2.00 lacs
95. Wilful defaulter to be published in paper DGM limit – Rs.25 lacs
96. CERSAI modification charges above Rs.5 lacs : Rs. 100 + ST
97. HO limit issue of new clips card waived what was the hot list charges – 150 + S T
98 Kisan OD flexi limit – Rs. 7.50 lacs – maximum but if recovery more than 90% then Rs.12.50lacs
99. Platimum Card Av. Balance in SB A/c – Rs.25,000. Average qtrly balance
100. Zero balance limit as per latest circular to which of the following accounts – Senior Citizen
Account/Non operative account/Zero balance initial account/All
101 HNI customer criteria – Wrong answer to be ascertained
102 Reduction in PMEGP training period –
103.OTS for NPA under EL valid till 31.12.2016
104. Conversion of Physical share into demat form – Dematerialisation
105. KYC is required if customer transaction in case exceeds – Rs.50,000/-
106. DD in lieu of lost draft upto and including Rs. 5000/- may be issued on Indemnify and without
inissuance on seeking non payment advice From drawee branch
107.Sick unit SSI erosion in networth due to cash losses to the extent of
50% of NW
108 Bailment of goods as security for payment of debt or performance of Contract is called Pledge.
109 Under Jeevandhar TOD upto Rs.5000/- or 50% of Pension amount of Previous month
110. Quick Mortality A/c NPA amount above Rs.5 lacs becomes NPA Within 12 months of grant.
111. In CC NG, Interest charged periodicity – Monthly
112. Canara Kisan OD satisfactory dealing one years
113. NRI/PIO can permit purchase – residential/commercial properties in India.
114 NRLM revolving limit _Rs. 10,000 to 15,000
115 MSME – small service sector investment limit : Rs. 10lacs to 2oo lacs
116 MSME Manufacturing – Micro investment limit : upto Rs. 25 lacs
117 MSME targets – Manufacturing Medium investment limit : Rs. 500 lacs to 1000 lacs ( 05 crore to
10 crore )
118 Weaker section target – 10% of ANBC
119 Agricultural loan No Margin upto Rs.1.00 lacs
120 Service Area Norms – Now not hold good
121 Krishi Mitra Card limit – Rs.50,000/-
122 Agriculture loan above Rs.25,000/- Circle Sanction limit in days – 45 days or 6
Weeks
123 High Risk – Co-operative Society
124 Aadhar digit – 12
126 Mother of all deposits – SB Account
127 Joint Account Maintaining members – 4
128 SB rate decided by – Bank discretion
129 Canara Saral withdrawal limits – Rs.10,000/- per month
130 Canara Champ age limit – 11 years 364 days
131 Why CASA prefer over Term deposits : Low cost
132 SB power plus average balance limit Rs.1,00,000/- quarterly
133 Canara Mahila A/c – Credit Card free and Insurance covered
134 Current Account Urban Minimum balancve – Rs.5,000/-
135 Unclaimed deposit over 10 years
136 % of loan amt. granted for Purchase land under staff HL – 60%
138 Calculation of interest of loan account under MCLR
139 Lien A/c relationship between Bank & Customer – Creditor, Debtor
140 Registration of firm is important and banker insist to open account as registration
Approves legality
141 % of transaction in electronic form – above 55%
142 Cheque validity – 3 months
143 Cheque is wrongly return whose liability – Paying banker
144 FCNR(B) period deposits – 5 years ______
146 OL Committee reconstitute – Every year
147 Cheque alteration – change bearer to order, crossing
148 Base rate – 9.65%
149. Under SARFAESI Act, notice period before taking over Possession –60 days
150. In DRT upto what amount – Rs.10 lacs & above
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 250 | P a g e
 151 Sale of Mutual Fund products by banks helps in ____ Non Intt. Income/ Free based income
152 Average minimum balance in SB in Metros – Rs.1,000/-
153 PMAY Carpet Area for L I G is – 60 Sq.mtrs
154 Liability of a bank on guarantee issued by it is _____ contigent/non fund based Liability
155 Redressal grievancies in respect of credit card, generally time limit is 10 days
157 RIDF managed by NABARD
158 Risk of loss arising from various types of human or technological error – Operational Risk
159 DPG is calculated ________Just like Term loan
160 Publication of willful defaulter whose liability is more than Rs.25 lacs
161. Bank are not permitted to extent fund based and non fund based facilities to Private builders are
_______
162. How much marks for Clerk in grading as Superior – 36 – 45
163 Mandatory leaves away from desk is 10 days per annum
164.In SB in Metro with/without cheque book minimum balance amount Rs.1000/- per month
165. In customer cash credit limit A/c, debit balance of Rs.1000/- adjusted from SB A/c by which
right – Right to Set off
166 Present Reverse Repo rate – 6.00
167 New Chief Customer Service Officer – Internal Ombudsman
168 For Reetired employee maintaining Canara Pension Loan - |Rs.4.00 lacs / 20 Months/loan period
169 Current Assets are Liquid Security for banks
170 Penalty for delay credit of Pension amount in Pensioners’ A/c – Repo rate + 2%
171 What is CGTMSE fee for > 5 lacs loan for others : 1% + 10% premium = 1.10%
172. Loans for repair of house in urban centre under priority sector – Rs.5 lacs
173 For travelling foreign country minimum amount - $ 2,50,000/- per ananum
174. For walk in customer name and address details to be obtained for amount Above Rs.50,000/-
175 Periodic updation (Photographs of customer) in case of low Risk – 10 years
176. One cheque prepared on 01.01.2016 dated 30.01.2016 to customer and Customer has
presented in clearing on 14.01.2016 the cheque will be called As Post dated cheque.

RECALLLED QUESTIONS -CLERICAL TO OFFICER PROMOTION TEST ON 19.04.2015

1. CUSTOMER OD A/C HAS OVERDRAWN RS 2000/-. SAVING A/C HAS BALANCE RS 3000.
THE BANK ADJUSTS THE OD A/C BY WHICH RIGHT. LIEN/SET OFF/ APPPROPRIATION :
Right to Set off
2. SMERA STANDS FOR : SMALL & MEDIUM ENTREPRISES RATING AGENCY
3. THE BAL IN SMALL SB A/C AT ANY POINT SHOULD NOT EXCEED – Rs. 50000/
4. AEPS STANDS FOR : AADHAR ENABLED PAYMENT SYSTEM
5. UNDER OMBUDSMANS PARTY ON RECEIVING THE AWARD CAN APPEAL TO THE
APPELLATE AUTHORITY IN HOW MANY DAYS – 30DAYS
6. CPPC STANDS FOR : CENTRAL PENSION PROCESSING CELL
7. TDS DEDUCTED FOR INTEREST AMT – ABOVE RS 10,000/
8. CARE STANDS FOR: CREDIT ANALYSIS & RESEARCH LTD
9. MIN SUBSCRIPTION IN PPF CANNOT BE LESS THAN – Rs.500/
10. IBPP STANDS FOR : INTERNET BILL PRESENTATION & PAYMENT
11. CC LIMIT 4LACS. STOCK 6 LACS . MARGIN 25 % . WHAT IS DRAWING POWER?: 4.5 LACS
12. MAX AWARD BY OMBUDSMAN IN CASE OF CREDIT CARD – RS. 1 LAC
13. PRESENT SLR : 21.5%
14. RBI HAS ADVISED BANKS TO ENSURE THAT DD'S TO BE ISSUED INVARIABLY WITH
AC PAYEE CROSSING FOR – RS 20,000 & ABOVE
15. RBI AT WHICH RATE PURCHASES OR REDISCOUNTS B/E OR OTHER CP – BANK RATE
(7.75%)
16. FROM THE FOLLOWINGS - WHICH IS NOT A MATERIAL ALTERATION ON THE CHQ :
ANSWER IS A

A) STRIKING OUT BEARER AND MAKING CHQ PAYABLE TO ORDER, B).CHANGING THE DATE, C)
CHANGING THE CHQ FROM PAYABLE TO ORDER, TO BEARER
17. WHEN IS CUSTOMER DAY CELEBRATED: 15th of Each Month
18. LOANS TO FARMER AGAINST PLEDGE/HYP OF AGRI PRODUCE ( PRODUCE LOAN) - Rs. 50
LAKH Under Priority Sector
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 251 | P a g e
19. LOANS TO INDIVIDUALS FOR EDUACTIONAL PURPOSE INDIA FOR HOW MUCH AMT WILL BE
UNDER PRIORITY SECTOR -Rs.10 LACS FOR INLAND STUDIES – NOW BOTH FOR INLAND &
ABROAD
20. WHAT IS THE NORMAL STRENGTH OF SHG UNDER NRLM – 10-15 PERSONS
21. IN KCC INSURANCE PREMIUM BORNE BY BANK AND CUST IN RATIO OF – 2:1 ( 10:5)
22. WHAT IS THE VALIDITY PERIOD OF KCC - FIVE YEARS
23. INSURANCE AMT IN KCC FOR PARTIAL DISABILITY – RS 25000 ( DEATH & PERMANENT
Disability – Rs. 50,000)
24. UNDER CGTMSE LIABILITY UPTO 5 LAC HOW MUCH COVER AVAILABLE TO MICRO ENT: 85%
( 4.25 lacs )
25. LIMITATION PERIOD FOR MORTGAGE – 12 YEARS
26. UNDER EUITABLE MORTGAGE BY WAY OF DEPOSIT OF TITLE DEEDS THE PROPERTY MUST
BE SITUATED WHERE? : Places notified by state govt.
27. UNDER SARFAESI CASES INCLUDE WHER OUTSTANDING LIAB IS – ABOVE 1 LAC
28. THE APPRAISAL OF DEFERRED PAYMENT GUARANTEE IS SIMILAR TO - TERM LOAN
29. PROVISION REQUIRED FOR AGRI & SME SECTOR FOR STANDARD ASSET – 0.25%
30. TIER I CAPITAL ALSO KNOWN AS – CORE CAPITAL
31. WHICH IS LATEST UCP- : UCP 600 (wef 01.07.2007 )
32. AMT ACCEPTED IN CASH BY AUTH DEALERS AGAINST SALE OF FOREIGN EXCH – UPTO Rs.
50,000
33. UNDER LRS AMT PERMITTED – USD 2.5 LAC
34. MAX TERM PERIOD FOR NRE DEPOSITS – 10 YRS
35. INT PAID FOR PREMATURE WITHDRAWAL OR PREMATURE EXTENSION OF NRE DEPOSITS :
1% Penalty ( upto one crore – Ref cir 108-2015 )
36. FCNR (B) A/C HELD ONLY IN THE FORM OF – TERM DEPOSITS
37. IN EEFC A/C JOINT HOLDER CAN BE IN THE FORM OF – FORMER OR SURVIVOR with Close
Relatives
38. THE PACKAGE USED FOR INSPECTION – MIRROR / DARPAN/ CHHAYA/ OR NONE: DARPAN
39. WHICH OF THE ITEMS WILL NOT BE AN ASSET IN BANKS BAL SHEET – ADVANCES/FIXED
ASSET/ DEPOSITS/ DEPOSITS
40. IF THE PRINCIPAL OR INT PAYMENT REMAINS OVERDUE BETWEEN 31-60 DAYS – SMA 1
CATEGORY
41. PROCESS OF COVERTING PHYSICAL SHARES INTO ELECTRONIC FORM –
DEMATERIALIZATION
42. LOAN TO INDIVIDUAL AGAINST SHARES IN PHYSICAL FORM: Rs. 10 LACS
43. FOR COUNTERFEIT NOTES A CONSOLIDATED REPORT AS PER PRESCRIED FORMAT TO BE
SUBMITTED TO POLICE AUTHORITIES IF IN A SINGLE TXN NOTE IS IN – FIVE PIECES OR MORE IN
ONE SHOT AND IF FOUR PIECES THEN CONSOLIDATED REPORT THROUGH NODAL OFFICE TO
LOCAL POLICE STATION
44. MIN AMT IN RTGS : Rs. 2.00 LACS
45. NEFT 12 HRLY SETTLEMENT ON ALL DAYS & EXCEPT 2ND & 4TH SATURDAY
46. UNDER CANARA UNNATI MAX LOAN AMT: Rs. 100 lacs
47. UNDR NPS MINIMUM SUBSCRIPTION IN AYR : Rs.6000.00
48. FEATURES OF NATIONAL AGRICULTURAL INSURANCE?: CROP DAMAGE COVERAGE
49. SENIOR CITIZEN HOUSING LOAN SCHEME WAT IS THE MAX REPAYMENT PERIOD?: 15YRS
OR 75YRS OF AGE
50. MAX NUMBER OF PERSONS IN JLG? : 10 ( 4-10 )
51. MAX PEOPLE IN SHG? : 20 ( 10-20 )
52. MAX AMT / REPAYMENT PERIOD IN MATSYA PARIRAKSHAN? : 50,000 / 35 MONTHS
53. FOR LOAN AGAINST SECOND HAND VEHICLES HOW OLD THE VEHICLE SHUD B TO AVAIL
THE SAME? :5YRS
54. BOOK FOR SMARTPHONE WHERE CUSTOMER GETS ALL INFO THRU MENU?: E-INFOBOOK
35. CAPITAL ADEQUACY RATIO RELATED TO? : CRAR
55. RELATION BETWEEN BANK N JUDGEMENT DEBTOR: DEBTOR & CREDITOR

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 252 | P a g e
56. R RETURN WHEN SUBMITTED TO RBI? : FORTNIGHTLY BASIS – 15th & Last day of the
month
57. RIGHT OF CREDITOR TO REATIN THE POSSESSION OF GOODS N SECURITY BELONGING TO
THE DEBTOR TILL THE DEBT DUE TO HIM ARE PAID?: PLEDGE
58. MAX CASH WITHDRAWAL THRU CANARA BANK DEBIT CARD?: Rs.40,000
59. MAX CASH WITHDRAWAL THRU POS, MERCHANT ESTABLISHMENT?: Rs. 1000 PERDAY PER
CARD
60. JOINT A/C CAN B OPENED IN NRE & FCNR (B) WITH CLOSE RELATIVES WITH THE
OPERATION? : FORMER OR SERVIVOR
61. AS PER CIRCULAR OF AUG 2014 MAX AMT UNDER TAX SAVER CAN BE Rs. 150000.00
62. FOR LOCKER RENT AND BREAK OPEN CHS TAKEN AS SECURITY- 3YRS RENT
63. A PERSON IS LEGALLY DEAD IF NOT TRACEABLE FOR – 7 YRS FROM THE DATE OF FIR
64. CRR IS CALCULATED ON – NET DEMAND & TIME LIAB
65. FOR INJECTION OF LIQUIDITY TXN DONE BY RBI – REPO RATE
66. WHAT IS CONVERSION: FOREIGN CURRENCY INTO LOCAL CURRENCY ( SAY - INR )
67. SALE NOTICE UNDER SARFAESI – 30 DAYS
68. NO OF DIGITS IN AADHAR : 12
69. IN SME SMALL SERV INVT IN EQUIP UPTO Rs. 200 LACS
70. IN A & B IS JOINT A/C E OR S OPERATION WITH X AS NOMINEE. A DIES THE DEPOSIT ON
– BOTH B & NOMINEE OF A
71. ROC TO BE DONE WITH RTO ALSO TO PREVENT – SALE OF VEHICLE WITHOUT
INFORMATION TO THE CREDITOR AND COMPANY
72. INTEREST SUBVENTION FOR AGRICULTURE?: 2% & ( also additional 3% for prompt
Payment)
73. HOUSING LOAN FOR REPAIRS IN URBAN & RURAL AREAS?: Rs. 5 lacs & Rs. 2 lacs
73. EDUCATION LOAN PRIORITY SECTOR ABROAD?: Rs. 10 lcas WILL BE IN Priority sector
irrespection of Loan sanctioned amount. NOW BOTH FOR INLAND & ABROAD
74. NO COLLATERAL SECURITY IN SME UPTO? : Rs. 100 lacs
75. JOINT LIABILTY GROUP PER MEMBER MAX AMT? : Rs. 50,000 per person
76. UPTO 5 LACS GUARANTEE COVER TO MICRO ENTP? : 85%
77. LIMITATION OF DEMAND PROMISSORY NOTE?: three years
78. BASE RATE TO BE REVIEWED BY BANK ? : QUARTERLY BASIS
79. MAX. LOAN TO FARMER FOR DIRECT AGRILCULTURE ? : NO LIMIT DEPENDS ON ELIGIBILITY
80. UNDER PRIORITY SECTOR LOAN TO DEALERS IN FERTILISERS, CATTLE FEED, POULTRY MAX
AMT? : Rs.500 LACS - NOW CLASSIFIED INTO MSME SERVICE / MANUFACTURING BUT NOT
IN AGRIL
81. LOAN TO CORPORATES DIRECT AGRIL UNDER PRIORITY SECTORS ? : Rs. 200 lacs / Two
crores – NOW CLASSIFIED INTO MSME SERVICE / MANUFACTURING BUT NOT IN AGRIL.
82. NO COLLATERAL SECURITY IN AGRI. AMT? : Rs. 1.00 lacs ( For KCC – Rs. 1.50 lacs,
Satisfactory dealing : Rs.1.25 lacs, Tie up arrangements : Rs.3.00 lacs )
83. EDUCATION LOAN NO COLLATERAL SECURITY AMT? : Rs. 7.50 lacs
84. FAMILY INCOME OF BORROWER FOR DRI IN URBAN AREAS?: Rs. 24000.00 ( Rural : Rs.
18000.00)
85. PROVISIONG OF DOUBTFUL L ASETS FOR 12 MONTHS TO 3 YEARS?: 40% ( But deficit
portion – 100% )
86. BANK CAN SELL NPA AFTER IT HAS REMAIND IN ITS BOOKS FOR? : Discretion of Banks
87. MIN AMT FOR RTGS? : Rs. 2.00 lacs
88. FCNR (B) CAN BE OPENED IN ? TERM DEPOSIT
89. WHO CANNOT BECOME A PARTNER?: HUF
90. DEATH CLAIM SETTLEMENT IN HOW MANY DAYS?: 15 DAYS
91. IN HOW MANY YEARS OF NO TRANSACTION DOES A SAVING AND CURRENT ACCOUNT
BECOME INOPERATIVE – TWO YEARS
92. MIN BALANC IN SMALL SAVINGS DEPOSIT BANK A/C? : ZERO / NO BALANCE

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 253 | P a g e
 93. FULL FORM OF CASA? : CURRENT ACCOUNT & SAVING ACCOUNT
94. IN CASE OF A/C TRANSFER WITHIN HOW MANY DAYS THE ADDRESS PROOF HAS TO BE
SUBMITTED IN TRANSFEREE BRANCH ? SIX MONTHS
95. FOR MAKING NOMINATION IN TERM DEPOSITS HOW MANY WITNESS SIGNATURE
REQUIRED ? ONE BUT IF DEPOSITOR IS ILLITERATE THEN TWO WITNESS
96. MAX IMUM CLAIM IN CREDIT CARD BY BANKING OMBUDSMEN?: Rs. 1.00 LACS
97. PURCHASER OF DD CANNOT DO THE FOLLOWING? STOP THE DD
98. MAX AMT IN PPF? Rs. 1.50 lacs
99. MAX AMT IN CANTAX SAVER?: Rs.1.5 lacs
100. MIN AMT TO OPEN FD? : Rs. 1000
101. HOUSING LOAN AMT FOR OFFICERS?: Rs. 50.0 lacs
102. DICGC INSURANCE IS NOT AVAILABLE TO THE FOLLOWING?: Deposits above Rs. 1.00 lacs
103. OFFICIAL LANGUAGE ACT? : 1963
104. HINDI ACCEPTED AS OFFICIAL LANGUAGE ON? : 14.09.1949
105. CANARA BANK WEBSITE FOR PUBLIC INFO, BANKING FACILITIES?: www.canarabank.com
106. NEW VERSION OF INTERNET BANKING PASSWORD CAN BE OF LENGTH?: 8 to 12 ( Alpha
Numeric, Special Character & First will be uppercase)
107. LOAN UPTO 25000/- APPLICATION TO BE PROCESSED IN? : two weeks
108. BANK RATE: 7.00%
109. RELEASE OF FOREIGN EXCHANGE NOT EXCEEDING IN 1 FINANCIALYR FOR ONE OR MORE
PRIVATE VISITS (EXCEPT NEPAL N BHUTAN)?: USD 10,000.00
110. RELEASE OF FOREIGN EXCHANGE NOT EXCEEDING FOR BUSINEES TRAVEL?: USD
25,000.00
111. CRYSTALLISATION MEANS?: CONVERTING FOREIGN LIABILITY INTO RUPEE LIABILITY
( DELINKING FOREIGN ELEMENTS FROM BILL & CONVERTING TO INR )
112. NUMBER MENTIONED ON THE CHEQUE FOR SAVING A/C BESIDES MICR? 10
113. WHEN NO TIME OR DATE IS MENTIONED ON BILL OF EXCHANGE, WHEN IT WILL BE
PAYABLE: ON DEMAND
114. IN A CHEQUE WHEN THE AMOUNT WRITTEN IN WORDSAND FIGURES DIFFER WHICH WILL
HOLD GOOD ? :AMOUNT WRITTEN IN WORDS
116. KYC DETAILS CIM 50..IDENTIFICATION ADDRESS PROOF CENSUS CODE OF CUSTOMER
117. GOLD CREDIT CARD MIN AND MAX LIMIT... Rs. 50000/- AND Rs. 25,00000/
118. GUARANTEES NOT ISSUED FOR ---- MORE THAN 10 YEARS
119. LPD ABOVE WHAT AMOUNT TO HO : Rs. 100 lacs / one crore
120. OD ACCOUNT RELATIONSHIP BETWEEN BANK AND CUSTOMER...CREDITOR AND
DEBTOR.
121. HOW MUCH REMITTANCE FOR MEDICAL TREATMENT ABROAD...UPTO USD 100000/
122. CANARA BANK HAS TIE UP WITH UNITED INDIA INSURNCE CO LTD for general
insurance purpose
123. REGISTRATION OF FIRM NOT DONE THEN....CANNOT SUE OTHERS FOR RECOVERY OF
DUES
124. IN MOBILE BANKING MAX AMT THAT CAN BE TRANSFERRED – Rs.50000/
125. ATM COMPLAINTS TO BE SOLVED --- WITHIN 7 DAYS. ( otherwise Rs.100 per day
Penality )
126. CARD WHICH ACTS AS AN IDENTITY CARD FOR THE STUDENT---CAMPUS CARD
127. A RESIDENT CAN KEEP UPTO HOW MUCH USD WITH HIM --- USD 2000 & no limits for
Coins
128. CANARA KISSAN OD TO FARMERS HAVING SATISFACTORY DEALINGS... FOR 1 YEAR
129. DISPLAY OF HYPOTHECATION BOARDS NOT INSISTED ....FOR LOANS UPTO RS.25000/
130. FINANCE TO 2ND HAND VEHICLES NOT BE MORE THAN five years
131. NULM SCHEME MAXIMUM PROJECT COST For --Individuals – Rs. 2.00 lacs & Group: Rs.
10.00 lacs
132. REPAYMENT TERM FOR MEDIUM TERM LOAN : 36 to 84 months
133. SMA 0 SPECIAL MENTION ACCOUNTS ---PRINCIPAL OR INTEREST NOT OVERDUE FOR
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 MORE THAN 30 DAYS BUT ACCOUNT SHOWING SIGNS OF INCIPIENT STRESS
134. WORKING CAPITAL = 12 CURRENT LIABILITIES 60 . CURRENT RATIO IS CURRENT
ASSETS / CURRENT LIABILITIES = 72/60=1.20
135. WHO DECIDES SAVING BANK RATE – BANK
136. HINDI PAKHWARA (HINDI FORTNIGHT) CELEBRATED FROM ? : 01st Sept. to 15th Sept. 2015
137. HOW MANY MEMBERS FROM LOK SABHA THERE IN THE OFFICIAL LANGUAGE
PARLIAMENTARY COMMITTEE: 20 members from lok sabha ( out of 30 members committee of
Parliament – 10 from Rajya Sabha )
138. OFFICIAL LANGUAGE APPLICABLE TO ALL STATES AND UNION TERRITORIES EXCEPT -
TAMILNADU
139. PERIODICITY OF OFFICIAL LANGUAGE IMPLEMENTATION COMM. MEETINGS ---
QUARTERLY
140. AS PER RTI ACT IN HOW MUCH TIME INFORMATION TO BE GIVEN TO CUSTOMER – 30 DAYS
141. LOAN GRANTED FOR SHORT DURATION CROPS WILL BE NPA IF OVERDUE FOR - 2
CROPPING SEASONS
142. FOR CROP LOANS UPTO 3 LACS INTEREST SUBVENTION TO FARMERS REPAYING
LOANS PROMPTLY
143. WHEN REMITTANCE DONE TO CURRENCY CHEST, COUNTING IN FRONT OF BANK
OFFICIALS FOR DENOMINATION OF Rs. 500 & Rs. 1000. NOTES.
144. WHEN CHEQUE DISHONOURED NOTICE TO BE SENT BY PAYEE TO THE DRAWER
WITHIN ...30 DAYS.
145. LIMIT FOR SENDING REMITTANCES TO NEPAL BY NEFT...Rs. 50000/
146. MAXIMUM INDIAN CURRENCY THAT CAN BE TAKEN ABROAD BY RESIDENTS-Rs.25000
(export & import of INR)
147. WHAT ACCOUNTS FCNR B CAN BE OPENED AND IN WHAT CURRENCIES....FREELY
CONVERTIBLE CURRENCY
148. NRE DEPOSITS CAN BE OPENED FOR A MAXIMUM PERIOD OF...10 YEARS.
149. WHEN CHEQUE IS WRONGLY RETURNED BANKER IS LIABLE TO –DRAWER
150. AS PER RTI ACT IN HOW MUCH TIME INFORMATION TO BE GIVEN TO CUSTOMER – 30 DAYS
151. LOAN GRANTED FOR SHORT DURATION CROPS WILL BE NPA IF OVERDUE FOR - 2
CROPPING SEASONS
152. FOR CROP LOANS UPTO 3 LACS INTEREST SUBVENTION TO FARMERS REPAYING
LOANS PROMPTLY
153. KYC POLICIES AND THEIR KEY ELEMENTS...CUS.ACCEPTANCE, CUS.IDENTIFICATION,
MONITORING OF TRANSACTIONS AND RISK MANAGEMENT.
154. WHEN NON CUSTOMER WALKS IN FOR SINGLE TRANSACTION OR MULTIPLE
TRANSACTIONS ABOVE WHAT AMOUNT KYC INSISTED...RS.50000/-
155. DICGC MAX CLAIM 1 LAKH...PREMIUM BORNE BY BANK
156. LOAN AGST LIC POLICIES...LINKED TO SURRENDER VALUE OF POLICY
157. LOANS TO DISTRESSED PERSONS TO REPAY DEBTS TO NON INSTITUTIONAL
LENDERS...MAX Rs.50000/
158. RISK COVERED BY RKBY....DAMAGE TO CROPS
159. DRI INTEREST....4% PER ANNUM SIMPLE
160. EL INTEREST SUBVENTION PROVIDED BY GOVT....ENTIRE INT CHARGED DURING
MORATORIUM PERIOD
161. BALANCE SHEET SHOWS ...WHAT A FIRM OR COMPANY OWES AND WHAT THEY OWN
162. IN DOUBTFUL ASSETS PROVISIONING OF UNSECURED PORTION...100%
163. STANDARD ACCOUNTS PROVISIONING....0.40%
164. PURCHASING BANK CAN RESELL NPA OTHER THAN TO ORIGINAL BANK AFTER
KEEPING THE SAME IN ITS BOOKS for 12 months
165. NON MAINTENANCE OF MIN BAL. ...NO PENAL CHARGES
166. IF FOREIGN CURRENCY MORE THAN USD5000 OR F C AND TRAV CHQS MORE THAN
USD 10000. : CURRENCY DECLARATION FUND IS REQUIRED
167. NIL MARGIN FOR EDUCATION LOAN UPTO ...4 LACS
168. LOAN TREATED DOUBTFUL ... AFTER 12 MONTHS OF BECOMING NPA
169. LOW RISK CATEGORY CUSTOMERS PHOTO PROOF OF ADDRESS AND PROOF OF
IDENTITY TO BE OBTAINED ONCE IN 10 YEARS
170. NPA ACCOUNT WILL NOT BE CONSIDERED AS WILFUL DEFAULT... IF DUE TO

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 255 | P a g e
 ECONOMIC RECESSION.
171. PRESENTLY VALIDITY OF A CHEQUE... 3 MONTHS.
172. PERIODICITY OF CUSTOMER MEET IN A BRANCH... MONTHLY.
173. VEHICLE FINANCED BY BANK LIEN NOTED BY RTO OFFICE... SO THAT THE CUSTOMER
DOES NOT SELL THE VEHICLE WITHOUT THE KNOWLEDGE OF THE BANK
174. PROVIDING FINANCIAL SERVICES TO POOR... FINANCIAL INCLUSION.
175. SUMPOORNA KAVACH PLAN... INSURANCE COVER Rs. 30000.
176. LOK ADALAT... Rs.20 LAKHS.
177. SHARES TRANSFERRED IN ELECTRONIC FORM... DEMATERIALIZATION.
178. CALCULATION OF INTEREST IN LOAN ACCOUNT... MONTHLY
179. AL LHV MARGIN – 10 PERCENT.
180. SWAVALAMBAN... PENSION SCHEME... 12 TIMES CREDIT.
181. CANARA BANK RECEIVED AWARD OF BEST IT SECURE FOR? : Skoch Renaissance
award 2014 UNDER INDIA’S BEST PROJECT FOR RUDSETI
182. RD DONE FOR MIN AMT AND MIN PERIOD: Rs. 50.00 & six months
183. BUSINESS DEBIT CARD THE ANNUAL FEE OF RS 300 IS CHARGES IF THE MINIMUM
ANNUAL CARD TURN OVER FOR PURCHASE DOES NOT REACH UPTO Rs. 50,000.00
184. BUSINESS CORRESPONDENT IN BANK ARE FOR banking business
185. CAPITAL ADEQUACY RATIO : CRAR
186. BEST AWARD TO OUR BANK UNDER INFORMATION TECHNOLOGY ( IT ) : SKOCH
RENAISSANCE
187. . AWARD 2014 : UNDER INDIA BEST PROJECTS 2014 CATEGORY RUDSETI & also won
MSME banking Excellence awards 2014 – best bank award winner.

CIRCULAR – 2015-16 BASED QUESTIONS

DEPOSITS
1. What is the eligibility for sb power plus a/c ?avgqtrly balance of 1 lakh
2. What is the minimum and maximum amount that can be deposited in
RD dhanvarsha scheme? (rs.1000 – rs. 1 lakh)
3. Whether nri’s are permitted to open RD dhanvarsha a/cs ? yes
4. What is the topup amount in RD dhanvarsha ? 10 instalmentsincl the regular instalment
5. What is the mode of remittance in NRI RD dhanvarsha ? debit from NRE SB
6. What is the age limit for opening a PMJDY a/c ? 18 to 59
7. How many members in a family can open PMJDY a/c ? One
8. What is the life cover available for the PMJDY a/c holders ? rs.30000
9. How many members in a family are eligible for the life cover ? one
10. A customer opted for a non callable deposit requests the branch to close the deposit
prematurely .whether customers request can be accepted? No
11. What is the normal validity period for canara small savings deposit a/c ? 12 months
12. When partial freezing in non kyc complaint a/csapplied ? 3 months after giving due notice
13. Acustomer approached the branch for renewing a deposit after 10 days of maturity. What is
the rate of interest to be paid for the renewed deposit ?from when the deposit will be renewed.
From the date of maturity till the date of renewal – sbrate
From the date of renewal – rate prevailing as on the date for the period of deposit
14. Risk category of the customers dealing with precious stones/metals/bullion ? – High risk
15. What is average balance to be maintained in the sb a/c opened in a semi-urban branch in a
month ? – Rs.1000
16. A cheque of value , 1 crore isdishonoured . The a/c should be closed if the cheque is
dishonoured for ------------ no of occasions ? 6
17. A cheque of value > 1 crore is dishoured for the fourth occasion, what should be done with the
a/c ? close the a/c
18. A cheque of value > 1 crore is dishoured for the fourth occasion, what should be done with the
a/c ? close the a/c
19. Age limit in case of PMJJBY and insurance company – 18 to 50 years / LIC
20. Age limit in case of PMJSBY and insurance company – 18 to 70 years / UIIC
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 21. Threshold limit for tax waiver for co-operative societies deposits ? rs.20000
22. Sukanyasamriddhi a/c - ? appf scheme for girl child of 10years old.
23. No of min transacations in the pmjdy a/c to be eligible for OD ? 4 customer induced trans
24. charges paid to BC for seeding aadhar number in the a/cs of pensioners - ? Rs.10/-
25. Canara junior saving scheme amount that can be withdrawn using debit card per month
Rs.5000
26. Maximum amount that can be with drawn per month -Rs.10000
27. Periodic KYC updation for Low risk customers-10 years
28. Customer type for exstaff senior citizens for deposits- Z4 category
29. Callable deposit option eligible for deposits above- Rs.1 crore and above
30. Non kyc compliance accounts - Partial freezing for 3 months
Next 3 months close with permission -Minimum balance charges to be collected from the
BSBD account holders NIL
31. how many cheques are issued to canara privilege account holders - 500
32. Whether credits can be permitted in inoperative / dormant accounts- Yes
33. Positive confirmation for low / medium customers to be obtained- Not required
34. Sb canara champ - balance in excess of amount to be transferred to KDR - Rs.5000
35. SB power plus – eligibility criteria - Quarterly average balance of 1 lakh and above
36. Number of free withdrawals permitted in the SB accounts - 50
37. Charges for stop payment instructions SB accounts in rural areas - Rs.100 /- per cheque
38. Risk category for inoperative/dormant account - Medium
39. Validity period of canara small savings bank deposit account
40. In the canara privilege current account cash handling charges are free upto a limit of
5 lakhs for denominations of 100 and above
41. For whom canara elite card will be issued? - Sb gen-y and canara pay roll package scheme
42. Ex-employee senior citizens gets additional interest in domestic deposits- Additional 1.50%

PRIORITY SECTOR -QUESTIONS BASED ON CIRCULARS

1. Advances to minority sector under priority sector - 15%
2. Maximum amount that can be lent for purchase of small tractors - Rs.3.50 lacs
3. Settlement of subsidy under NULM (SJSRY) -On quarterly basis
4. NULM should be classified as - Advances to weaker section
5. Maximum subsidy payable under weavers credit card – RS.10000
6. CGTMSE claims should be submitted - Before 5th of succeeding month
7. Under PMEGP the percentage towards women - 30%
8. Within how many months a long term crop becomes NPA - 18 months
9. Power generation – conventional / nonconventional to be classified as -MSME –
MANUFACTURING – infrastructure
10. Warehouse / godown / cold storage units - To be classified as MSME- services – infrastructure
– agri product -indirect finance to agri –irrespective of location
11. Credit risk guarantee fund trust for LIG / EWS segments of urban areas – cover available
90 % for the loans upto 2 lakhs, 85% for the loans >2 lakhs and <=5 lacs
12. CGTMSE – remittance of guarantee fee by way of DD /po only
13. obtention of land records for agri loans above Rs.1 lac
14. JLG group exposure should not exceed Rs.10 lacs
15. What is the term loan component in CANARA MSME CAP - 200 lakhs
16. Repayment period for EL n- loan amount <=7.5 lacs - 10 years
17. Subsidy amount available in the case of dairy entrepreneurship development scheme for
general category - 25%
18. What is the credit score a new borrower has to get to be eligible for availing a MSME loan of
less than 2 crores? - 60 in the new scoring sheet
19. What is the maximum amount that can be lent under the scheme canara MSE SARAL
20. Canara MSE SMART is a scheme for Professionals like architects/civil engineers/ CAs etc
21. Canara MSME VAHAN –is a scheme for purchase of – 2 & 4 wheelers forbusiness purpose
and creating business assets. Goods carriers not permitted Canara VIJETA is a scheme for
Women entrepreneurs

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 22. SRMS – scheme for rehabilitation of manual scavengers - cash assistance that can be received
by member of the family Rs.40000/- to be withdrawn in monthly instalments of rs.7000/-
each
23. Power generation to be classified as what ?msme-manufacturing
24. Tyre retreading to be classified as what ?msme – services
25. Canarakisansamparakabhiyan refers to what ? farmers mass contact campaign
26. Canara vehicle loan for agriculturists – whether two wheelers can be sanctioned? No
27. Income criteria for agriculturists canara vehicle loan ? gross annual income 4 lakhs
28. What is the land holding eligibility criteria for allied activities borrower? Not required
29. Repayment periodicity for agriculturist under canara vehicle loan ? as per the cropping pattern
30. What is minimum land holding required for disburing a power tiller loan ? – 2 acres of irrigated or
4 acres of unirrigated land
31. Repayment period for sheep&goatloan ? 7 to 9 years with gestation period of 12-18 months
32. Tenability period for kcc/kisan od – once in 2 years
33. As per new priority sector guidelines target for small & marginal farmers ? 8%
34. Target for micro enterprises - 7.5%
35. Maximum education loan under priority ? 10 lakhs
36. Housing loan priority ? – metro pc-35 then 28 lakhs others pc-25 then 20 lakhs
37. Minimum and maximum loan amount for the Pradhan mantra mudra yojana ?
Rs.50000/- to rs.10 lakhs rs50000/- shishu 50000 to 5 lakhs- Kishore > 5 to 10 lakhs –
tarun
38. PMEGP – maximum amount ? manufacturing – project cost – rs,25 lakhs,
Services - rs. 10 lakhs
39. Loans sanctioned to individuals for solar power financing – to be categorized as
Priority – limit ?rs.10lacs for others – 15 lakhs
40. subsidy available under NULM scheme ?
41. Branches to submit the CGTMSE application for the eligible loans – when ?to be submitted thro’
SAS package before 5th of succeeding month.
42. Cgtmse cover will will be available to the credit limits provided the credit limits are charged with
int rate at ? BR +4%
43. Income criterial inder Pradhan MantriAwasyojana ? rs.3 lakhs – EWS rs.6 lakhs – LIG
44. Max loan amount under PMAY ? rs.24 lakhs
45. Loans to Food and agro industries – classification and loan quantum ? agriculture-ancillary units –
rs.100 crores

TEST YOURSELF
1) The decision to develop a Monetary Policy Framework follows from the recommendation of the
Expert Committee to Revise and Strengthen the Monetary Policy Framework or what is popularly
known as the committee report,
which had suggested that RBI target to bring down retail inflation to 8% by January 2015 and 6% by
January 2016.
a) Dr. Urjit Patel*. b) Dr. Usha Thorat, c) Dr. Nachiket Mor d) Vijaya Bhaskar
2) As per the Monetary Policy Framework, the objective of monetary policy is to primarily maintain
price stability, while keeping in mind the objective of growth. The monetary policy framework in India
shall be operated by the Reserve Bank of India. Inflation means :
a) The monthly change in the CPI-C expressed in percentage terms.
b) The year-on year change in the half yearly CPI-C expressed in percentage terms.
c) The year-on year change in the monthly CPI-C expressed in
percentage terms* d) None of these.
3) As per the Monetary Policy Framework, the Reserve Bank will aim to bring inflation below ____
percent by January 2016. The Target for financial year 2016-17 and all subsequent years shall be
____ % with a band of +/- ____%.
a) 5;4; 2 b)7;5; 3 c)7 ; 4; 2 d) 6;4;2*
4) As per the Monetary Policy Framework, once every six months, the Reserve Bank shall publish a
document explaining Sources of Inflation; Forecasts of Inflation for the period between _____ to
______ months from the date of the publication of the document; and Flexible inflation target. a) Six
; Eighteen* b) Five ; Fifteen, c) Four ; Ten d) Six ; Ten
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 258 | P a g e
5) As per the Monetary Policy Framework, the Reserve Bank shall be seen to have failed to meet the
target if inflation is more than ____ percent for three consecutive quarters for the financial year
2015-16 and all subsequent year; Less than ____ percent for three consecutive quarters in 2016-17
and all subsequent years. a) 8;4 b) 5;2 c) 6;2* d) 5;3
6) As per the Monetary Policy Framework, if the Reserve Bank fails to meet the Target it shall set
out in a report to the Central Government covering which of the following aspects:
a) The reasons for its failure to achieve the Target;
b) Remedial actions proposed to be taken by the RBI;
c) An estimate of the time-period within which the Target would be achieved pursuant to timely
implementation of proposed remedial actions.
d) All of the above*
7) The Government of India, Ministry of Housing and Urban Poverty Alleviation (MoHUPA), has
restructured the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY) and launched the ___.
a) National Urban Livelihood Mission(NULM)*, b) Prime Minister Rojgar Yojana., c) National Rural
Livelihood Mission (NRLM), d) Jan Dhan Yojana.
8) Under National Urban Livelihood Mission the maximum unit project cost for individual micro
enterprise cases is Rs.
_____: a) 4 lac b) 3 lac c) 2 lac* d) 5 lac
9) As per National Urban Livelihood Mission scheme, which of the following statement is incorrect:
a) Two sub components in terms of beneficiaries are covered namely: Individual Enterprises (SEP-I),
& Group Enterprises (SEP-G).
b) In case of Individual Enterprises (SEP-I), Banks are mandated not to accept any collateral security.
c) In case of Individual Enterprises (SEP-I), the banks may approach Credit Guarantee Fund Trust for
Micro and Small Enterprises setup by SIDBI and Government of India for the purpose of
availing guarantee cover for SEP loans as per the eligibility of the activity for guarantee
cover.
d) In case of Individual Enterprises (SEP-I), repayment schedule ranges from 5 to 7 years after initial
moratorium of 6-18 months as per norms of bank.
e) None of the above*
10) Under the Group Enterprises (SEP-G) component of National Urban Livelihood Mission scheme,
which of the following statement is incorrect:
a) A Self Help Group (SHGs) or members of an SHG constituted under SJSRY / NULM or a group of
urban poor desirous of setting up a group enterprise for self-employment can avail benefit of
subsidized loans under this component from any bank.
b) The group enterprise should have minimum 5 members with a minimum of 70% members from
urban poor families.
c) The maximum unit project cost for a group enterprise is 10,00,000 (Rs. Ten lakhs) and no
collateral to be obtained.
d) The repayment schedule ranges from 5 to 7 years after initial moratorium of 6-18 months as
decided by bank.
e) The target is Women – 30%; Disabled – 3%; and SC / ST – on Pro – rata to local population.
f) None of the above*
11) With respect to loan against shares, debentures and bonds, which of the following is incorrect as
per RBI guidelines:
a) Loans against the security of shares, debentures and bonds should not exceed the limit of Rupees
Ten lakhs per individual if the securities are held in physical form and Rupees Twenty lakhs per
individual if the securities are held in dematerialised form.
b) Banks should maintain a minimum margin of 50 percent of the market value of equity shares /
convertible debentures held in physical form.
c) In the case of shares / convertible debentures held in dematerialised form, a minimum margin of
25 percent should be maintained. These are minimum margin stipulations and banks may stipulate
higher margins for shares whether held in physical form or dematerialised form.
d) The margin requirements for advances against preference shares / non-convertible debentures and
bonds may be determined by the banks themselves.
e) None of the above.*
12) As per RBI directions, all Credit Institutions (CI’s) should become member of Credit Information
Companies (CICs) and submit data (including historical data) to them with in a period of ____
months.
a) 6 b) 2 c) 3 * d) 1
13) How many CIC’s have been granted Certificate of Registration by RBI ?
a) 4* b) 3 c) 2 d) 1
14) The one-time membership fee charged by the CICs, for CIs to become their members, shall not
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 259 | P a g e
exceed Rs._____ each and annual fees charged by the CICs to CIs shall not exceed Rs. ______
each.:
a) Rs.5,000; Rs.2,500 b) Rs.10,000; Rs.2,500, c) Rs.10,000*; Rs.5,000* d) Rs. 20000;
Rs.5,000
15) As per RBI guidelines to banks, a credit card a/c will be treated as NPA if the minimum amount
due, as mentioned in the statement, is not paid fully within ____ days from the next statement date
and the gap between two statements should not be more than one month. a) 90* b) 60 c) 50 d)
30
16) Reserve Bank of India has decided that the interest rates charged by an NBFC-MFI to its
borrowers will be the cost of funds plus margin, or the average base rate of the five largest
commercial banks by assets multiplied by____:
a) 5 b) 2.50 c) 2.75* d) 3.5
17) Securitisation Companies / Reconstruction Companies (SC / RCs) are permitted to convert a
portion of debt into shares of the borrower company as a measure of asset reconstruction provided
their shareholding does not exceed ____ of the post converted equity of the company under
reconstruction. a) 30% b) 20% c) 26%* d) 28%
18) Securitisation Companies / Reconstruction Companies (SC/RCs) are required to obtain, for the
purpose of enforcement of security interest, the consent of secured creditors holding not less than
____of the amount outstanding to a borrower as against ____hitherto. a) 30%, 75% b) 75%,
60% c) 60%,75%* d) 50%,75%
19) A person makes a draft payable in the name of another person from any particular bank for
an amount less than Rs.49,000/-. This person, on whose name the draft is made, further
endorses it in the name of another person in lieu of payment for purchase of goods or
services. The draft is used as a payment cheque without real money changing hands. In the
end, there is a specific group of people who deposits these drafts in their bank accounts, and
takes a commission of 1-2% to encash them. This process of conducting transactions is called:
a) Money Laundering b) Money Mules, c) Street Financing* d) Financial frauds
20)are individuals with bank accounts recruited by fraudsters to receive cheque deposit or wire
transfer for the purpose of money laundering. They receive cheque deposits or wire transfers and
then transfer these funds to a/cs held on behalf of another person or other individuals, minus a
certain commission.
a) Street Financing b) Money Mules*, c) Money Laundering d) Financial frauds
21) For Money Transfer Service Scheme, Indian Agent should be an Authorized Dealer Category-I
bank or an Authorized Dealer Category-II or a Full Fledged Money Changer with minimum Net Owned
Funds of ________:
a) 30 lakhs b) 35 lakhs c) 40 lakhsd) 50 lakhs*
22) A cap of ________has been placed on individual remittance under the Money Transfer Service
Scheme. Amounts up to Rs.50,000/- may be paid in cash to a beneficiary in India. Further, only 30
remittances can be received by a single individual beneficiary under the scheme during a calendar
year. a) US $2000 b) US $2500* c) US $ 3000 d) US $3500
23) The outstation cheques under Speed Clearing will be paid on T+1 or 2 basis within______:
a) 48 hrs* b) 24 hrs c) 6 hrs d) 12 hrs
34) Presenting branches are currently permitted to levy charges at a rate not exceeding _____per
cheque (inclusive of all charges other than Service Tax) for cheques of above Rs. 1 lakh presented
through Speed Clearing. No charges are payable for cheques of value up to Rs. 1 lakh from Savings
a/c customers. Banks would be free to fix charges for collection of other types of accounts for all
values and also from Savings a/c customers for cheque of value above Rs. 1 lakh.
a) Rs. 100 b) Rs. 150* c) Rs. 200 d) Rs. 250
24) For evaluation and ratings of banks, RBI uses the_______. The new system is termed as
_______. The new system to capture the risks that may cause a bank to fail. a) CAMELS;
INROADS* b) INROADS; CACS, c) CAMELS; CACS e) CRISIL; CARE
25) As per the new module advised by CERSAI, for delay condonation w.e.f. 1st December, 2014,
whereby any transaction which is filed after 30 days of creation of security and upto _____will
attract additional fee.
a) 45 days b) 60 days*, c) 90 days d) None of these
st th
26) If the registration on CERSAI is done from 31 to 40 day after the date of transaction, the
additional fee will be charged _______ if loan amount is upto Rs. 5 lakh. The amount of additional
fee will be ______if loan amount is above Rs. 5 lakh.
a) Rs. 500 & 1,000* b) Rs. 1000 & 1,500, c) Rs. 1,000 & 2000 d) Rs. 500 & 1,500
st th
27) If the registration on CERSAI is done from 41 to 50 day after the date of transaction, the
additional fee will be charged ______ if loan amount is upto Rs. 5 lakh. The amount of additional

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 260 | P a g e
 fee will be _______if loan amount is above Rs. 5 lakh.
a) Rs. 750 & 1,000 b) Rs. 1250 & 2,500*, c) Rs. 1,250 & 2000 d) Rs. 1000 & 1,500
st th
28) If the registration on CERSAI is done from 51 to 60 day after the date of transaction, the
additional fee will be charged _________ if loan amount is upto Rs. 5 lakh. The amount of
additional fee will be if loan amount is
above Rs. 5 lakh. a) Rs. 2000 & 2500 b) Rs. 2000 & 3000, c) Rs. 2500 & 5000* d) Rs.
3000 & 5000
29) While doing Risk Rating, an asset is downgraded from A+ rating to A rating. What type of risk is
involved?
a) Market Risk b) Credit Risk*, c) Interest Rate Risk d) None of these
30) To help in the government's 'smart cities' programme, SEBI approved a new set of norms for
listing and trading of municipal bonds on stock exchanges, while channelising household
investments for urban infrastructure development. These municipal bonds, also known as _____
bonds. a) Muni Bonds* b) Corporation Bonds, c) Smart Bonds d) None of these
31) The Reserve Bank notified the decision to raise foreign direct investment (FDI) cap in the
Insurance sector to ____ from existing cap of 26%. a) 45% b) 49%* c) 50% d)
51%
32) As per new Foreign Trade Policy, value of Export Performance FOB / FOR for ‘Two Star Export
House’ category during current and previous 2 years is : a) 10 b) 15 c) 25* d) 20
33) As per new Foreign Trade Policy, value of Export Performance FOB /FOR for ‘Four Star Export
House’ category during current & previous 2 years is: a) 100 b) 500*, c) 1000 d) 2000.
Records of transactions to be maintained for at least _____from the date of transaction,
instead of ten years from the date of cessation of transactions, and records pertaining to
identification of the customer and his address to be preserved for at least ____ after the
business relationship is ended.
a) 10,10* b) 10,15 c) 15,10 d) 5,10
35) The Suspicious Transaction Report (STR) bank as a whole, should be furnished to the FIU–
IND, within _____ days of arriving at a conclusion that any transaction, including an attempted
transaction, whether cash or non-cash, or a series of transactions integrally connected are of
suspicious nature:
a) 10 days b) 7days* c) 15 days d) 5 days
36) Under Pradhan Mantri Suraksha Bima Yojana – Premium payable is Rs.____ per annum per
member and sum insured on death is ____and partial disability is ____. a) Rs.10; 2 lakhs; 1 lakh b)
Rs. 12; 2 lakhs; Rs. 50,000
c) Rs.25; Rs.1 lakh; Rs. 50,000 d) Rs.12; Rs.2 lakh; Rs. 1 lakh*
37) To be eligible for claim under PM Jeeven Jyoti Yojna, the age limit for all saving accounts holder
should be between:
a) 18 to 45 yrs b) 18 to 50 yrs* c) 18 to 55 yrs d) 18 to 60 yrs
38) The premium payable under PM Jeeven Jyoti Yojna, is _______ p.a. and assures benefits of Rs.
____ on death due to any reason. a) Rs. 330 & Rs. 2 lakh* b) Rs. 250 & Rs. 2 Lakhs, c) Rs.300
& Rs. 2.50 lakhs d) Rs. 230 & Rs. 3 lakhs
39) The limit of Education loan for vocational purpose in India for course duration upto 3 months is
Rs. ________.
a) 20,000* b) 30000 c) 40000 d) 25000
40) What is the Full form of MUDRA?
a) Micro Units Development and Refinance Agency Ltd *, b) Modern Units Development and
Refinance Agency Ltd, c) Micro Units Development and Reconstruction Agency Ltd, d) None of
these
41) Which tax has been abolished in Budget 2015-16:- a) Goods and Service Tax b) Wealth Tax*,
c) Corporate Tax d) Property Tax
42) MUDRA is set up with a corpus of ___ and a credit
guarantee corpus of Rs 3,000 crore.
a) Rs.15,000 Crore b) Rs. 20,000 Crore*, c) Rs. 30,000 Crore d) Rs. 50,000 Crore
43) As per the new budget, Surcharge has been increased to ____ for individuals earning 1 crore and
above annually and on firms with an annual income of Rs. 10 crore or more. a) 10% b) 12%*
c) 14% d) 15%
44) The full form of GIFT City is:-
a) Gandhinagar International Finance Tec-City, b) Gujarat International Finance Tec-City*, c)
Gujarat Indian Financial Tec-City, d) Gandhinagar Indian Financial Tec-City
45) Full Form of CRILC City is:
a) Central Repository of Information on Large Credits*, b) Central Reserve of Information on Large
Credits, c) Central Repository of Information on, d) None of the above
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46) Full form of MIBOR;
a) Mumbai Inter bank Offered Rate*, b) Mutual Inter bank Offered Rate, c) Mumbai
International Offered Rate
b) Mumbai Inter bank Offer & Bid Rate
47) The limit of Education loan for vocational purpose in India for course duration for 3 to 6 months is
______:
a) 40,000 b) 50000* c) 60000 d) 75000
48) The limit of Education loan for vocational purpose in India for course duration of 6 months to 1
year is ______:
a) 60,000b) 85,000 c)1,00,000 d) 1,25,000*
49) The limit of Education loan for vocational purpose in India for course duration above 1 year is :
a) Rs.1.5 lakh* b) Rs. 2 lakhc) Rs.2.5 lakh d) Rs.3 lakh
50) Under SHG all the members of the group must be from BPL, however, a maximum of 20% in
general and 30% in exception can be from marginally above poverty line subject to the condition that
APL members not eligible for subsidy
a) 20%, 30%* b) 25%, 35%, c) 20%, 25% d) 15%, 25%
51) If the bank has raised an unauthorized/erroneous direct debit to an account and on verification of
the entry it is found to be erroneous and the customer does not involve a third party, the bank will
endeavor to complete the process of verification within a maximum period of _____ working days
from the date of reporting of erroneous debit. In case, the verification involves a third party or where
verifications are to be done at overseas centers, the bank shall complete the verification process
within a maximum period of _____ month from the date of reporting of erroneous transaction by the
customer.
a) 7 : one* b) 5; one c)14; two d) 10; three
52) The Bank will undertake to carry out direct debit / ECS debit instructions of customers in time. In
the event the bank fails to meet such commitments customer will be compensated to the extent of on
account of delay
in carrying out the instruction/failure to carry out the instructions.
a) Any financial loss the customer would incur* b) Rs. 1000/- c) Rs. 2500/- d) Rs. 5,000/
53) Where it is established that the bank had issued and activated a credit card without consent of
the recipient, the bank would not only reverse the charges immediately but also pay a penalty without
demur to the recipient amounting to _______ as per regulatory guidelines in this regard.
a) Twice the value of charges reversed*, b) Thrice the value of charges reversed, c) Value of
charges reversed
b) None of these
54) In case a cheque has been paid after stop payment instruction is acknowledged by the bank, the
bank shall reverse the transaction and give value-dated credit to protect the interest of the customer.
Any consequential financial loss to the customer will be compensated. Such debits will be reversed
within ____ working days of the customer intimating the transaction to the bank a) 3 b) 5 c)
2* d) 7
55) The bank will compensate the customer for undue delays in affording credit once proceeds are
credited to the Nostro Account of the bank with its correspondent. Such compensation will be given
for delays beyond
week / weeks from the date of credit to Nostro Account/ due date after taking into account normal
cooling period stipulated. The compensation in such cases will be worked out keeping in view interest
for the delay in crediting proceeds and compensation for any possible loss on account of adverse
movement in foreign exchange rate.
a) One*, b) Two, c) Three, d) Four
56) As part of the compensation policy of the bank, the bank will pay interest to its customer on the
amount of collection instruments in case there is delay in giving credit beyond the time period specified
in banks cheque collection policy. Interest for delayed collection shall be paid at the Savings Bank rate
for the period of delay beyond ____, ____, _____ days as the case may be in collection of outstation
cheques.
a) 5/10/15 b) 7/10/14* c) 3/5/7d) none of these
57) The bank will pay interest to its customer on the amount of collection instruments in case
there is delay in giving credit beyond 14 days. Interest will be paid at the rate applicable for term
deposit for the corresponding respective period or Saving Bank rate, whichever is higher. In case of
extraordinary delay, i.e. delays exceeding ____ days interest will be paid at the rate of ___% above
the corresponding Term Deposit rate. a) 60;2 b) 30;3 c) 90; 2* c) 45;2
58)In the event the proceeds of cheque under collection was to be credited to an overdraft/loan
account of the customer, interest will be paid at the rate applicable to the loan account. For
extraordinary delays, interest will be paid at the rate of ____above the rate applicable to the
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 loan account. a) 4% b) 3% c) 2%* d) 2.5%
59) In line with the compensation policy of the bank, the bank will compensate the account holder
in respect of instruments lost in transit. In case intimation regarding loss of instrument is conveyed
to the customer beyond the time limit stipulated for collection_____, ____, _____ days as the case
may be) interest will be paid for the period exceeding the stipulated collection period at the rates
specified above. a) 4/8/12 b) 5/10/15 c) 7/10/14* d) 6/10/13
60)Issue of Duplicate Draft and Compensation for delays Duplicate draft will be issued within a
_______ from the receipt of such request from the purchaser thereof. For delay beyond the
above stipulated period, interest at the rate applicable for of corresponding period will be
paid as compensation to the customer for such delay.
a) Fortnight; Fixed Deposit* b) 10 days; Fixed Deposit, c) Fortnight; cumulative Deposit d) 30
days / Fixed Deposit
61)In addition, bank will pay interest on the amount of the cheque for a further period of
________ days at Savings Bank rate to provide for likely further delay in obtaining duplicate
cheque / instrument and collection thereof.
a) 15* b) 10 c) 7 d) 12
62)Violation of the Code by banks agent In the event of receipt of any complaint from the
customer that the bank’s representative / courier or DSA has engaged in any improper conduct
or acted in violation of the Code of Bank’s Commitment to Customers which the bank has
adopted voluntarily, the bank is committed to investigate the matter and endeavor to
communicate the findings to the customer within _____ working days from the date of receipt
of complaint and wherever justified, compensate the customer for financial loss, if any, as
contemplated under this policy.
a) 10 b) 7* c) 12 d) 15
In terms of the guidelines for lenders liability, and the Code of Bank’s Commitment to customers, the
bank would return to the borrowers all the securities / documents / title deeds to mortgaged property
within _____ days of repayment of all dues agreed to or contracted The bank will compensate the
borrower for monetary loss suffered, if any due to delay in return of the same. In the event of loss of
title deeds to mortgage property at the hands of the banks the compensation will cover out of pocket
expenses for obtaining duplicate documents plus a lump sum amount as decided by the bank.
a) 7 b) 15*, c) 21 d) 25
64) It is mandatory for bank to reimburse the customer, the amount wrongfully debited on account of
failed ATM within a maximum period of _____ working days from the receipt of the complaint. For
any failure to re-credit the customer’s account within the stipulated period from the date of receipt of
the complaint, bank shall pay compensation of Rs._____ - per day to the aggrieved customer. This
compensation shall be credited to the customer’s account automatically without any claim from the
customer, on the same day when bank affords the credit for the failed ATM transactions.
a) 5;100 b) 10;150, c) 14;150 d) 7;100/-*
65) Which of the following statement is incorrect?
a) The bank will not honour cheques drawn on current accounts maintained by other banks with it
unless arrangements are made for funding cheques issued. Issuing bank should be responsible
to compensate the cheque holder for non payment / delayed payment of cheques in the absence
of adequate funding arrangement.
b) The Bank would not compensate the customer for delays in collection of cheques designated in
foreign currencies sent to foreign countries as the bank would not be able to ensure timely credit
from overseas banks.
c) In the event a cheque or an instrument accepted for collection is lost in transit or in the clearing
process or at the paying bank’s branch, the bank shall immediately on coming to know of the
loss, bring the same to the notice of the account holder so that the account holder can inform the
drawer to record stop payment and also take care that cheques, if any, issued by him / her are
not dishonoured due to non-credit of the amount of the lost cheques / instruments. The bank
would provide all assistance to the customer to obtain a duplicate instrument from the drawer of
the cheque.
d) The bank would not compensate the customer for any reasonable charges he/she incurs in getting
duplicate cheque / instrument upon production of receipt. The instrument is to be obtained from
a bank/ institution who would charge a fee for issue of duplicate instrument.*
66) The Reserve Bank has set out a five-pillar framework to guide its developmental and regulatory
measures. Which of the following is not the regulatory pillar:
a) PILLAR – I: Clarifying and strengthening the monetary policy framework.
b)PILLAR – II: Strengthening banking structure through new entry, branch expansion, encouraging
new varieties of banks, and moving foreign banks into better regulated organisational forms.
c) PILLAR – III: Broadening and deepening financial markets and increasing their liquidity and
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 263 | P a g e
resilience so that they can help absorb the risks entailed in financing India’s growth.
d) PILLAR – IV : Expanding access to finance to small and medium enterprises, the unorganised
sector, the poor, and remote and underserved areas of the country through measures to foster
financial inclusion.
e) PILLAR – V: Improving the system’s ability to deal with corporate distress and financial
institution distress by strengthening real and financial restructuring as well as debt recovery.
f) None of the above*
68) Which pillar of RBI’s developmental and regulatory measures emphasizes on
Strengthening banking structure through new entry, branch expansion, encouraging new
varieties of banks, and moving foreign banks into better regulated organisational forms. a) Pillar I b)
Pillar III c) Pillar II* d) Pillar V
69) Which pillar of RBI’s developmental and regulatory measures emphasizes expanding access to
finance to small and medium enterprises, the unorganised sector, the poor, and remote and
underserved areas of the country through measures to foster financial inclusion. a) Pillar I b)
Pillar IV* c) Pillar II d) Pillar V
90) On a review of the permitted transactions under the Rupee Drawing Arrangements (RDAs), the
Reserve Bank increased the limit of trade transactions from the existing Rs.5,00,000/- per transaction
to Rs._______ per transaction, with immediate effect.
a) 10,00,000 b) 12,00,000 c) 15,00,000*d) 17,50,000
91) The concept of a _______ account was introduced in the current framework as an important step
in fraud risk control.
a) Special Mention account. b) Red Flagged *, c) High Risk account. d) Early Mortality account.
92) A is one where suspicion of fraudulent activity is thrown up by the presence of one or more Early
Warning Signals (EWS). This concept has been introduced in the current framework as an important
step in fraud risk control. a) Red Flagged Account* b) Special Mention account., c) High Risk
account. ____________ d) Early Mortality account.
93) The threshold for Early Warning Signals and Red Flagged Account is an exposure of ________ or
more at the level of a bank irrespective of the lending arrangement (whether solo banking, multiple
banking or consortium). a) 100 million b) 250 million c) 500 million* d) 1000 million
94) The officer responsible for the operations in the account should be sensitized to observe and
report any manifestation of the Early Warning Signal promptly to the or any other group constituted
by the bank
for the purpose immediately.
a) Fraud Monitoring Group (FMG) *, b) Fraud Management Group (FMG), c) Core Monitoring
Group (CMG), d) Fraud Surveillance Group (FSG)
95) The Framework for fraud risk management in banks also includes broad guidelines relating to
the, which of the following?
(i) Reporting to the Central Repository of Information on Large Credits (CRILC).
(ii) Lending under consortium or multiple banking arrangements
(iii) Staff accountability.
(iv) Filing complaints with law enforcement agencies.
(v) Penal measures for fraudulent borrowers
(vi) Central Fraud Registry.
a) (i) & (ii) only b) (iii) to (vi) only, c) All of the above* d) None of these
96) The Reserve Bank has advised all public sector banks and select private sector and foreign banks
to appoint an internal Ombudsman. The internal Ombudsman would be designated as :-
Chief Ombudsman Service Officer, B) Chief Customer Ombudsman Officer, C) Internal
Ombudsman Customer Service Officer, D) Chief Customer Service Officer*
97) The Reserve banks has directed all ______ and few to appoint Chief Customer Service
Officers. (Internal Ombudsman).
a) Public Sector Banks; Private Sector & Foreign Banks*
b) Private Sector Banks; Foreign Banks
c) Private Banks & Foreign Banks
d) Private Sector Banks; Public Sector Banks
98) As per the revised norms, the procedures for acquisition of accommodation on lease / rental
basis by all commercial
banks will now be determined by the____ :- a) State Govt. b) RBI, c) Banks themselves* d)
Ministry of Finance
99) P.J. Nayak Committee has prescribed seven broad themes to the Reserve Bank to advise all
public sector banks to suitably determine the agenda items and the periodicity thereof, keeping in
view that there is adequate focus on matters of strategic and financial importance. The seven themes
include business strategy, financial reports and their integrity, risk, compliance,_______, and
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human resources.
a) Customer protection, Financial inclusion*
b) Customer awareness, Financial integrity
c) Customer awareness, Fraud management.
d) Strategic Marketing, Financial inclusion
100) The Reserve Bank had, in the first bi-monthly monetary policy statement 2015-16, proposed to
do away with the _____ and instead, replace it with the seven critical themes. b) Calendar of
Reviews*
c) Monitoring of strategic assets, D) Calendar of performance parameters
101) In order to enable Private Sector Banks to attract and retain professional directors, the Reserve
Bank has issued guidelines on compensation for non-executive Directors for implementation by
private sector banks, that will reflect market realities and will be within the parameters specified in
the Banking Regulation Act, 1949 and the Companies Act, 2013. Such compensation, however, shall
not exceed _____ per annum for each director. a) 1 million* b) 1.5 million c) 0.5 million d) 2
million
102) The Board may, at its discretion, provide for in the policy, payment of compensation in the form
of ______ to the non-executive directors (other than the Part-time Chairman), subject to the bank
making profits. a) Bonus b) Commission on profits*, c) Additional Shares d) None of these
103) In addition to the directors’ compensation, the bank may pay _______ to the non-executive
directors and reimburse their expenses for participation in the Board and other meetings. a) Sitting
fees* b) Commission, c) Bonus d) Additional allowances
104) Banks in private sector would be required to obtain prior approval of the Reserve Bank for
granting _______ to the part-time non-executive Chairman. a) Bonus b) Commission, c)
Remuneration* d) Loans
105) The compensation policies of banks would be subject to supervisory oversight including review
under the Supervisory Review and Evaluation Process (SREP)
under ______ framework. a) Monitoring of critical areas
a) Pillar 2 and Basel III framework
b) Pillar 3 and Basel III framework
C) Pillar 2 and Basel II framework* D) Pillar 1 and Basel II framework
106) Banks are required to make disclosure on remuneration paid to the directors on an ______
basis at the minimum, in their Annual Financial Statements. a) Semi annual b) Quarterly c)
Monthly d) Annual*
107) Under the revised criteria for opening of branches / extension counters / specialised branches
within the area of operation of the StCBs, Capital to Risk (Weighted) Assets Ratio (CRAR) should not
be less than :- a) 9 percent * b) 10 percent c) 8 percent d) 10.5 percent
108) Under the same revised criteria, net Non Performing Assets (NPA) should be less than ______:
a) 9 percent b) 5 percent*, c) 8 percent d) 6 percent
109) The Reserve Bank has relaxed its requirement of additional factor of authentication (AFA)
for across all merchant categories to enhance customer convenience while ensuring security in card
based transactions.
a) Low Value Card Present Transactions, b) High Value Card Present Transactions, c) Small Value
Card Present Transactions, d) None of the above.
110) The Reserve Bank has advised all scheduled commercial banks that relaxation for additional
factor of authentication (AFA) requirement is permitted for transactions for a maximum value of
______: a) Rs. 2000 per transaction* b) Rs. 2500 per transaction, c) Rs. 5000 per transaction
d) Rs. 10000 per transaction
111) For additional factor of authentication (AFA) beyond the transaction limit prescribed by RBI, the
card has to be processed as a contact payment and authentication with:- _ a) PAN (AFA) b) MICR
(AFA), c) PIN (AFA)* d) IFSC (AFA)
112) Even for transaction values below the limit prescribed by RBI, the customer may choose to
make payment as a contact payment. In other words, customers cannot be compelled to do a
________ payment.
a) On the spot b) Contactless* c) Cash less d) None
113) The Contactless cards should necessarily be chip cards adhering to _________ compliant
payment standard, so as to be acceptable across the existing card acceptance infrastructure.
a) Europay, MasterCard and Visa (EMV)*
b) RuPay, MasterCard and Visa (RMV)
c) Only MasterCard and Visa.d) Europay and RuPay only.
114) The Reserve Bank has advised all scheduled commercial banks, that with effect from ________,
all new cards issued – debit and credit, domestic and international by banks shall be EMV chip and
PIN based cards. a) 16-8-2015 b) 1-9-2015* c) 1-1-2016 d) 1-4-2016
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115) The Reserve Bank has advised authorised dealer (category–I) banks that recognised non-
resident External Commercial Borrowing (ECB) lenders may enter into swap transactions with their
overseas bank which shall, in turn, enter into a back-to- back swap transaction with any AD Category-
I bank in India for mobilizing ______as per the prescribed procedure.
a) INR* b) $ c) Euro d) Discretion of the bank
116) On a review of the permitted transactions under the Rupee Drawing Arrangements (RDAs), the
Reserve Bank increased the limit of trade transactions from the existing Rs.5,00,000/- per transaction
to Rs. _______ per transaction, with immediate effect. a) 7,50,000 b)10,00,000 c) 12,50,000 d)
15,00,000*
117) Recently, which category of banks were advised by RBI under the framework for Revitalising
Distressed Assets in the Economy – Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action
Plan:
a) All Scheduled Commercial Banks (excluding RRB’s), b) Exim Bank c) SIDBI d) NHB e)
All of these*
118) With a view to ensuring more stake of promoters in reviving stressed accounts and provide
banks with enhanced capabilities to initiate change of ownership in accounts which fail to achieve the
projected viability milestones, banks may, at their discretion, undertake a by converting loan
dues to equity shares.
a) Strategic Debt Restructuring (SDR)*, b) Corporate Debt Restructuring (CDR), c)
Organizational Debt Restructuring (ODR), d) Stressed Debt Restructuring (SDR)
119) At the time of initial restructuring, the JLF must incorporate, in the terms and conditions, an
option to convert the entire loan (including unpaid interest), or part thereof, into ______ in the
company in the event the borrower is not able to achieve the viability milestones and/or adhere to
‘critical conditions’ as stipulated in the restructuring package. a) Bonds b) Shares* c)
Debentures d) All above
120) If the borrower is not able to achieve the viability milestones and/or adhere to the ‘critical
conditions’ referred to above, the JLF must immediately review the account and examine whether the
account will be viable by effecting a change in_______.
a) Structure b) Ownership* c) Legal Statusd) None
121) The decision on invoking the Strategic Debt Restructuring (SDR) by converting the whole or
part of the loan into equity shares should be taken by the Joint Lenders’ Forum ( JLF) as early as
possible but within _______days from the above review of the account.
a) 60 b) 45, c) 30* d) 90
122) The decision on invoking the Strategic Debt Restructuring (SDR) should be well documented
and approved by the majority of the Joint Lenders’ Forum members which comprise of minimum of
______ percent of creditors by value and _____ percent of creditors by number.
a) 60, 50 b) 80, 50, c) 55, 60 d) 75, 60*
123) Post the conversion, all lenders under the Joint Lenders’ Forum must collectively hold ______
percent or more of the equity shares issued by the company. a) 49 b) 60 c) 51* d) 45
124) For accounts which have been referred by the JLF to CDR Cell for restructuring, JLF may decide
to undertake the SDR either directly or under the ______ Cell.
a) Strategic Debt Restructuring, b) Corporate Debt Restructuring*, c) Organizational Debt
Restructuring (ODR), d) Stressed Debt Restructuring (SDR)
125) On completion of conversion of debt to equity as approved under Strategic Debt Restructuring,
the existing asset classification of the account, as on the reference date, will continue for a period of
______ months from the reference date.
a) 15 months b) 18 months* c) 12 months d) 10 months
126) Banks should ensure compliance with the provisions of _______ and JLF should closely monitor
the performance of the company and consider appointing suitable professional management to run
the affairs of the company.
a) Banking Regulation Act* b) Companies Act, 2013, c) Reserve Bank of India Act. d)
SARFAESI Act
127) On divestment of banks’ holding in favour of a ‘new promoter’, the asset classification of the
account may be upgraded to ______ , subject to the prescribed conditions.
a) Special Mention Account. b) Sub Standard, c) Standard* d) None of the above
128) At the time of divestment of their holdings to a ‘new promoter’, banks may the existing
debt of the company considering the changed risk profile of the company without treating the
exercise as ‘restructuring’ subject to banks making provision for any diminution in fair value of the
existing debt on account of the refinance.
a) Refinance* b) Rephrasec) Reschedule d) Capitalise
129) The Joint Lender Forum must approve the Strategic Debt Restructuring (SDR) conversion
package within ___ days from the date of deciding to undertake SDR. a) 90* b) 45 c) 60 d)
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30
130) Which of the following documents have been recently advised by RBI to be deemed to be
Officially Valid Documents (OVD’s) under simplified measures relating to KYC norms for ‘low risk’
customers for the limited purpose of proof of address where customers are unable to produce any
officially valid document:
i) Utility bill which is not more than two months old of any service provider (electricity, telephone,
postpaid mobile phone, piped gas, water bill);
ii) Property or Municipal Tax receipt;
iii) Bank account or Post Office savings bank account statement
iv) Pension or family pension payment orders (PPOs) issued to retired employees by Government
Departments or Public Sector Undertakings, if they contain the address;
v) Letter of allotment of accommodation from employer issued by State or Central Government
departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial
banks, financial institutions and listed companies. Similarly, leave and license agreements with
such employers allotting official accommodation; and
vi) Documents issued by Govt. deptt. of foreign jurisdictions and letter issued by Foreign Embassy or
Mission in India.
a) Only (i), (ii), (iii)b) Only (iv), (v), (vi), c) All except (v) & (vi) d) All of the above*
131) The compensation policies of banks would be subject to supervisory oversight including review
under the Supervisory Review and Evaluation Process (SREP) under framework.
a) Pillar 2 and Basel III framework, b) Pillar 3 and Basel III framework, c) Pillar 2 and Basel II
framework*, d) Pillar 1 and Basel II framework
132) With a view to developing strong risk management capabilities to manage agri-commodity price
risk, the Reserve Bank advised all scheduled commercial banks (excluding regional rural banks) to
encourage by the agri-borrowers through agri-commodity derivatives. a) Speculation b)
Crystalisation c) Hedging* d) Forward sale
133) The Reserve Bank advised all-India Term Lending and
a) Pension Life Certificates
Refinancing Institutions (AIFI) to make certain disclosures in
addition to the extant disclosure requirements in the Notes to Accounts in their Annual Financial
Statements relating to sale of ______ to Securitisation Companies / Reconstruction Companies.
a) Fixed assets. b) Non-Performing Assets*, c) Intangibles d) Investments.
134) On a review, the Reserve Bank allowed all scheduled commercial banks (excluding RRBs) to
invest in the
issued by other banks for financing of infrastructure and affordable housing. In order to prevent
double counting of regulatory exemptions allowed, such investments will be subject to prescribed
conditions. a) Long term debentures b) Long term loans
c) Long term bonds* d) Equity & preference shares
135) The RBI has continued to provide liquidity under overnight repos at ____ per cent of bank-wise
NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to
____ per cent of NDTL of the banking system through auctions. a) 0.50 ; 1 b) 0.25; 0.50 c) 0.25;
0.75* d) 0.50; 0.75
136) The Reserve Bank released the final guidelines for introduction of 6-year and 13-year cash
settled Interest Rate Futures (IRF) on Government of India Securities with residual maturity of
__________and _______respectively.
a) 4-8 years, 11-15 years* b) 6-8 years, 10-15 years, c) 7-8 years, 12-15 years d) 8-10 years,
12-5 years
137) Agency banks may also promote the use of among pensioners, which would eliminate the need
for physical presence at branches and issue of acknowledgement. b) Digital Life Policy, c) Pension
Life code _____________ d) Digital Life Certificate*
138) The Government of India has also launched a scheme for introduction of Aadhaar based digital
life certificates known as_________: a) Jeevan Life certificate, b) Jeevan Life code, c) Jeevan
Praman*, d) Jeevan Praman certificate
139) The RBI has permitted all banks authorised to deal in foreign exchange to allow remittances by
a resident individual up to _______ per financial year for any permitted current or capital account
transaction or a combination of both under Liberalised Remittance scheme. a) USD 1,50,000 b)
USD 2,00,000, c) USD 2,50,000* d) USD 1,75,000
140) As per the revised guidelines, the PAN Card is mandatory if the sale/purchase of Immoveable
property is valued excceding Rs. _____. Further, PAN is also needed if properties valued by stamp
valuation authority exceeds the amount of Rs. :
a) Rs 5 lakh and Rs 10 lakh b) Rs 10 lakh and Rs 10 lakh*, c) Rs 10 lakh and Rs 15 lakh d) Rs 10
lakh and Rs 20 lakh
141) Which of the following is correct regarding Time Deposit with a Banking Company w.r.t PAN
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 267 | P a g e
Card:
a) The PAN Card is mandatory if deposits aggregating is more than Rs. 5 lac during the year.
b) The PAN Card is mandatory even if depositor has an account with Co-op Banks, Post office, Nidhi,
NBFC companies.
c) The PAN Card is mandatory if deposits aggregating is more than Rs. 50,000/- during the year.
d) The PAN Card is mandatory if deposits aggregating is more than Rs. 1,00,000/- during the year.
a) Only a & b are true* b) All b & c are true
c) Only b & d are true d) All are true.
142) In case of deposits with Post office and Saving Bank, the PAN Card is mandatory if the amount
is exceeding Rs. _______: a) Rs 10,000 b) Rs 20,000, c) Rs 50,000 d)
Discontinued*
143) In case of Sale or Purchase of securities, the PAN Card is mandatory if the contract of
sale/purchase value is exceeding Rs. ____: a) Rs 5 lakh b) Rs 4 lakh, c) Rs 2 lakh d) Rs 1
lakh*
144) Which of the following statement is correct regarding Opening of an account (other than time
deposit) with a Banking Company:
a) PAN Card is compulsory for all the new accounts that are being opened with the banking company.
b) In case of opening of Basic Saving Bank Account there is no requirement of PAN Card.
c) Co-operatives banks also need to comply with the guidelines on Pan.
d) All of the above*
145) As per the revised guidelines, for installation of telephone / cellphone connections, the PAN Card
is : a) Mandatory b) Discontinued*, c) Varies from State to State. d) None of above
146) In case of Hotel / restaurant bill(s), the PAN Card is required if the cash payment on account of
the bill is exceeding Rs. _____: a) Rs 30,000 b) Rs 40,000 c) Rs 50,000* d) Rs 60,000
147) In case of cash purchase of bank Drafts / Pay orders / Banker’s cheque, the PAN Card is
mandatory if the amount aggregating exceeds Rs. _______ in a day: a) Rs 25,000 b) Rs 50,000*
c) Rs 60,000 d) Rs 80,000
148) In case of Cash deposits with the Banking Company exceeding Rs. _____ in a day, then the
PAN Card is compulsory: a) Rs 50,000* b) Rs 30,000 c) Rs 25,000 d) Rs 40,000
149) PAN Card is mandatory if the cash payment in connection with foreign travel for fare, payment
to travel agent, purchase of foreign currency is exceeding Rs. _______ at any one time:-
a) 20,000 b) 50,000* c) 1,00,000 d) 5,00,000
150) In case of Mutual funds unit transactions, the PAN Card is compulsory if the payment for
purchase of mutual funds units exceeds Rs. _______: a) Rs 35,000 b) Rs 50,000* c) Rs 45,000
d) Rs 60,000
151) Which of the following statement is true regarding purchase/sale of Shares, Debentures, RBO
bonds w.r.t PAN Card:
a) PAN Card is required if the purchase/sale of shares is exceeding Rs. 1 lac per transaction.
b) PAN Card is required if a person opens a demat account.
c) PAN is mandatory in case of purchase of debentures/bonds, RBI bnds is exceeding Rs. 50,000/
d) All of above*
152) PAN Card is compulsory if the payment of the premium is exceeding Rs. _______ in a year:
a) Rs 20,000 b) Rs 30,000, c) Rs 45,000 d) Rs 50,000*
153) In case of Purchase or sales of goods and services, including jewellery/bullion PAN Card is
mandatory if the purchase/sale of any goods and services is exceeding Rs. _____ per transaction:
a) Rs 50,000 b) Rs 1 lakh, c) Rs 2 lakh* d) Rs 2.5 lakh
154) In case of Cash cards/Prepaid instruments issued under Payment and Settlement Act, PAN Card
is mandatory if the cash payment aggregating is more than ____ in a year:
a) Rs 30,000 b) Rs 40,000, c) Rs 50,000* d) Rs 60,000
155) The Reserve Bank in its Fourth Bi-monthly Monetary Policy Statement, 2015-16, announced on
Sept. 29, 2015, decided to reduce the policy Repo rate under the liquidity adjustment facility (LAF) by
50 basis points and now it stands at _______: a) 6.00% b) 6.25 % c) 6.75%* d) 7.00%
156) The RBI has decided to continue to provide liquidity under overnight repos at 0.25 per cent of
bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term
repos of up to 0.75 per cent of NDTL of the banking system through auctions and continue with daily
variable rate repos and reverse repos to smooth liquidity.
a) 0.25 %, 0.50 % b) 0.25%, 0.75 %*, c) 0.5%; 0.75% d) None of these
157) Consequent to the changes in the Repo rate, the Reverse Repo rate under the LAF stands
adjusted to ______, and the marginal standing facility (MSF) rate and the Bank Rate to _____. a)
5.75 %; 7.75%* b) 4.75 %; 6.75 %, c) 4.50%; 6.50% d) 5.50%; 7.50%

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 268 | P a g e
158) rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate stand
revised. Effective rate from 29th Oct 2013, the penal interest is Bank Rate plus _____ percentage
points or Bank Rate plus ____ percentage points depending upon the duration of the shortfalls. a)
1.0; 3.0 b) 3.2; 5.1 c) 3.0; 5.0* d) 2.5; 5
159) Government of India has approved the extension of the Interest Subvention Scheme for the year
2015-16 for short term crop loans. Interest subvention @ _____% per annum will be made
available to the Public Sector Banks and the Private Sector Scheduled Commercial Banks (in
respect of loans given by their rural and semi-urban branches) on their own funds used for short-
term crop loans up to Rs.______ lac per farmer provided the lending institutions make available
short term credit at the ground level at ____ % per annum to the farmers. a) 2 ; 3; 7* b)
3; 4; 7 c) 3 ; 5 ; 7 d) 3; 4; 8
160) The Interest Subvention of _______ will be calculated on the crop loan amount from the date of
its disbursement / drawal up to the date of actual repayment of the crop loan by the farmer or up
to the due date of the loan fixed by the banks whichever is earlier, subject to a maximum period of
one year. a) 1% b) 2 %* c) 4% d) 8%
161) Additional interest subvention @ _____% per annum will be available to the farmers repaying
the loan promptly from the date of disbursement of the crop loan up to the actual date of
repayment or up to the due date fixed by the bank for repayment of crop loan, whichever is
earlier, subject to a maximum period of one year from the date of disbursement. This also implies
that the farmers paying promptly would get short term crop loans @ _____% per annum during
the year 2015-16. This benefit would not accrue to those farmers who repay after one year of
availing of such loans. a) 3; 4* b) 4; 6c) 5; 8 d) 7 ; 10
162) In order to discourage distress sale by farmers and to encourage them to store their produce
in warehouses against warehouse receipts, the benefit of interest subvention will be available to
small and marginal farmers having Kisan Credit Card for a further period of up to ______ months
post-harvest on the same rate as available to crop loan against negotiable warehouse receipt for
keeping their produce in warehouses. a) three 158) All penal interest b) five c) six* d)
eight
163) To provide relief to farmers affected by natural calamities, the interest subvention of 2% for
short term crop loans will continue to be available to banks for the ______ on the restructured
amount. Such restructured loans may attract normal rate of interest from the second year onwards as
per the policy laid down by the RBI.
a) 3 months b) 6 months c) 9 months d) first year*
164) In respect of 2% interest subvention for short term crop loans, banks are required to submit
their claims on a
of which, the latter needs to be accompanied by the Statutory Auditor's certificate certifying the
claims for subvention for the entire year ended March 31, 2016 as true and correct.
a) Quarterly basis b) Half-yearly basis*, c) Yearly basis d) None of the above
165) is essentially a management process integral to the establishment of sound internal accounting
functions and effective controls and setting the tone for a vigilant internal audit to preclude the
incidence of serious errors and fraudulent manipulations.
a) Concurrent* b) Separate c) Monthly d) Quarterly
166) Which of the following statement is correct with respect to modified provisions of
Concurrent Audit?
a) New areas posing risk and Non-branch units may be brought under the purview of concurrent audit
and the branches with high risk are to be subjected to concurrent audit irrespective of their
business size.
b) All specialised branches viz., agriculture, small and medium enterprises(SME), corporate,
retail assets,portfolio management, treasury, forex, back office, etc., may be covered under
concurrent audit.
c) Certain areas where risk has reduced on account of computerisation, implementation of core
banking system may be excluded from the purview of concurrent audit.
d) All of the above *
167) Concurrent audit at branches should cover at least __ % of the advances and ____ per cent of
deposits of a bank.
a) 50,50* b) 40,60 c) 30,70 d) 60,40
168) Concurrent Audit should be conducted in:
a) Branches rated as high risk or above in the last Risk Based Internal Audit or serious deficiencies
found in Internal Audit;
b) All specialised branches like large corporate, mid corporate, exceptionally large/very large
branches (ELBs/VLBs), SME;

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 269 | P a g e
c) All centralised processing units like Loan Processing Units (LPUs), service branches, centralised a/c
opening divisions, etc.
d) Any specialised activities, such as, wealth management, portfolio management services, card
products division, etc., data centres, treasury / branches handling foreign exchange business,
investment banking, etc. and bigger overseas branches, critical head office departments.
e) Any other branches or departments where, in the opinion of the bank, concurrent audit is
desirable.
f) All of these *
169) The Reserve Bank has set up _______ to collect, store, and disseminate data on all borrowers’
credit exposures.
a) Central Repository of Information on Large Credits (CRILC)*, AMFI c) ICRA d) ICAI
170) Out of the following which points determine the scope of Concurrent Audit?
a) To supplement the efforts of the bank in carrying out simultaneous internal check of the
transactions and other verifications and compliance with the procedures laid down.
b) To cover certain fraud - prone areas, such as, handling of cash, deposits, advances, foreign
exchange business, off-balance sheet items, credit-card business, internet banking, etc.
c) To keep a check on high-risk transactions having large financial implications as opposed to
transactions involving small amounts.
d) Areas, where the Reserve Bank has specifically advised the banks to be covered under concurrent
audit, may also be part of the checklist of the concurrent auditor.
e) All of the above*
171) The option to consider whether concurrent audit should be done by bank’s own staff or external
auditors (which may include retired staff of its own bank) is left to the discretion of individual banks.
Appointment of an external audit firm may be initially for one year and extended upto ____ years,
after which an auditor could be shifted to another branch subject to satisfactory performance. a) 2
years b) 3 years* c) 4 years d) 5 years
172) If external firms are appointed and any serious acts of omission or commission are noticed in
their working, their appointments may be cancelled and the fact may be reported to:- a) RBI b)
ICAI, Bank’s Audit Committee of the Board of Directors (ACB), c) All of These e) Only a and b*
173) The Reserve Bank has further advised banks to review the present system of concurrent audit
immediately and incorporate necessary changes therein. The modified concurrent audit system of the
bank should then be placed before the .
a) ICAIb) Audit Committee of Board of Directors (ACB)*, c) Shareholders d) None of these
174) The Reserve Bank has advised Scheduled Commercial Banks (excluding regional rural banks) to
make use of the information available in Central Repository of Information on Large Credits (CRILC)
and not limit their due diligence to seeking no-objection certificate (NOC) from the bank with whom
the customer is supposed to be enjoying the credit facilities as per the declaration. Further banks may
also seek ‘No Objection Certificate’ from the ____ bank where the initial deposit to current account is
made by way of a _____ a) Drawee, Cheque* b) Drawer, Cash, c) Drawer, Cheque d)
Drawee, Cash.
175) The Reserve Bank has advised that banks which have capital to risk weighted assets ratio
(CRAR) of 10 per cent or more and have also made net profit as of March 31 of the previous year
need not approach the Reserve Bank for prior approval for equity investments in cases where after
such investment, the holding of the bank remains less than 10 per cent of the investee company’s
paid up capital, and the holding of the bank, along with its subsidiaries or joint ventures or entities
continues to remain less than ____ per cent of the investee company’s paid up capital. a) 10 % b)
12.5 % c) 15% d) 20 %*
176) In order to streamline the existing processes and to obviate the need to approach the Reserve
Bank on case-tocase basis, the Reserve Bank has permitted commercial banks to grant loans and
advances to the
without seeking prior approval of the Reserve bank.
a) Chief Executive Officer / Whole Time Directors*, b) Chief Executive Officers / Managing Director,
c) Chief Financial Officer/ Managing Director, d) Chief Operating Officer / Whole Time Director
168) Which of the following category of loans can be granted to these officials:
a) Loan for purchasing of car, b) Loan for purchasing of personal computer, furniture, c) Loan for
constructing / acquiring a house for personal use., d) Festival advance and credit limit under
credit card facility, e) All of these*
179) Which of the following statements is true with regards to loans and advances to these officials?
a) The loans and advances should form part of the compensation / remuneration policy approved by
the Board of Directors or any committee of the Board to which powers have been delegated or
the Appointments Committee, as the case may be.*

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 270 | P a g e
b) Guidelines on Base Rate will be applicable on the interest charged on such loans.
c) The interest rate charged on such loans can be lower than the rate charged on loans to the bank’s
own employees. d)Other loan can also be sanctioned to Directors.
180) The Reserve Bank is issuing Banknotes in Mahatma Gandhi Series 2005 with a new numbering
pattern and special features for the visually impaired in ____, ____ and ______ denominations. a)
10, 50,100 b) 100, 500 and 1000 *, c) 50,100 and 500 d) 10, 500 and 1000
181) In the new Banknotes in Mahatma Gandhi Series 2005, in the numbering pattern, the numerals
in both the number panels of these denominations ____ in size from left to right, while the first ____
alphanumeric characters (prefix) remain constant in size. a) Ascend, 3* b) Descend, 3 c)
Ascend, 4 d) Descend, 4
182) With regards to special features for the visually impaired, in order to make it easier for them to
identify banknotes, the size of the identification mark in these denominations has been increased by
_____. a) 25% b) 50 %* c) 75 % d) 85%
183) The structure of Angular bleed lines in Banknotes in Mahatma Gandhi Series 2005 has been
introduced as
in 3 blocks in Rs. 500 & ____ lines in 4 blocks in Rs.1000 denominations. a) 1, 2, 3 b) 2,3,4
c) 3,4,5 d) 4,5,6*
184) The Reserve Bank has reviewed the procedure for detection of counterfeit notes in consultation
with the Government. Which of these points are true regarding these guidelines?
a) Banknotes tendered over the counter or received directly at the back office / currency chest
through bulk tenders should be examined for authenticity through machines and such of these
determined as a counterfeit one, shall be stamped as and ______ schemes as per the extant rates.
“COUNTERFEIT NOTE” and impounded.
b) When a banknote tendered at the counter of a bank branch or treasury is found to be counterfeit,
an acknowledgement receipt in the prescribed format must be issued to the tenderer, after
stamping the note.
c) No credit to customer’s account is to be given for counterfeit notes, if any, in the tender received
over the counter or at the
back-office / currency chest. d) All of these*
185) Customer charges, if any, levied on cash withdrawals shall not exceed ______ per cent of the
transaction amount at all centres irrespective of the limit of Rs.1000 / Rs.2000. a) 1 %* b)
1.5 % c) 1.75% d) 2%
186) The instructions on compensation to banks of the notional value of counterfeit notes detected
and reported and the system of lodging claims for compensation by Forged Note Vigilance Cell of
banks stand withdrawn and a penalty at__ of the notional value of counterfeit notes, in addition
to__the recovery of loss to the extent of the notional value of such notes, will be imposed. a)
40 % b) 60 % c) 80 % d) 100 %*
187) The Reserve Bank has reviewed and enhanced the limit for cash withdrawal at Point of Sale (POS -
for debit cards and open system prepaid cards issued by banks in India) from Rs.1000 to ________
per day in Tier III to VI centres.
a) Rs. 1500 b) Rs.2000* c) Rs. 2,500 d) Rs. 3000
188) The RBI has decided to pay agency commission to authorised banks for handling the work
relating to the _ Kisan Vikas Patra (KVP), 2014, Sukanya Samriddhi Account*
a) Kisan Vikas Patra (KVP), 2014, Atal Pension Yojana
b) Pradhan Mantri Jan Dhan Yojana & Atal Pension Yojana
c) PM Jeevan Jyoti Bima Yojana & PM Suraksha Bima Yojana
189) As part of the endeavour to smoothen the liquidity management operations, the Reserve Bank
has introduced STP in fixed rate Liquidity Adjustment Facility (LAF) Repo, fixed rate LAF Reverse Repo
and Marginal Standing Facility (MSF) operations. What does STP stand for? a) Short Term
Processing b) Straight Through Processing* c) Structured Total Processing d) None of these
190) Which of the following statement is correct with respect to the implementation of STP?
a) It will enable eligible participants to receive the credit or debit immediately on placement of the
bids or offers, subject to the availability of collateral or funds, within prescribed time window.
b) Through STP, Eligible participants can, as hitherto, place multiple bids/offers in the respective
liquidity facilities.
c) Settlement of the transaction will be automatic and immediate after the placement of the bid/offer.
The transactions undertaken by a participant will be final and request for cancellation of bids or
offers will not be entertained.
d) The automation of these facilities will, in no way, affect the discretionary character of these facilities
and the Reserve Bank will continue to determine the extent of liquidity injection / absorption
depending upon the prevailing liquidity conditions in

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 271 | P a g e
the system. e) All of these*.
191) The Reserve Bank has now allowed commercial banks (excluding regional rural banks and local
area banks) to slot their excess statutory liquidity ratio (SLR) securities and marginal standing facility
(MSF) eligible securities under the ______ bucket.
a) Day 1* b) 2-7 Days c) 8-14 Daysd) 15-28 Days
192) On a review, the Reserve Bank advised all scheduled commercial banks (excluding regional
rural banks) that a rate____ to the actual interest rate charged to the borrower before restructuring
may be used to discount the future cash flows for the purpose of determining the diminution in fair
value of loans on restructuring.
a) Less than b) Greater than, c) Equal to* d) None of these,
193) The existing overnight benchmark interbank rate in India is replaced from July 22, 2015 by a
new benchmark called the .
a) Financial Benchmarks India Private Ltd Overnight Mumbai Interbank Outright Rate (FBIL-
Overnight MIBOR)* b) LIBOR c) MIBOR d) None of these
194) The FBIL-Overnight MIBOR will be based on actual traded rates and will be administered by a
new company called the Financial Benchmarks India Private Ltd (FBIL). The existing rate called the
Overnight MIBID/MIBOR based on polled rates is set by . a) FIMMDA-BSE b) FIMMDA-NSE*,
c) FIMMDA-OTC d) FIMMDA-SHCIL
195) Financial Benchmarks India Private Ltd (FBIL) has been jointly formed as an independent
company for administration of benchmarks in financial markets by the which of the following
institutions?
a) Fixed Income Money Market and Derivative Association of India (FIMMDA)
b) Foreign Exchange Dealers’ Association of India (FEDAI)
c) Indian Banks’ Association (IBA) d) All of these*
196) To facilitate greater level of participation in Corporate Bonds by Stand alone Primary Dealers
(SPDs), the Reserve Bank has increased exposure ceiling limits in respect of single borrower/
counterparty from 25 per cent to _____ of latest audited Net Owned Funds (NOF) and in respect of
group borrower from 40% to of the latest audited NOF
only for investments in AAA rated corporate bonds. a) 50%; 65%* b) 40%; 50% c) 45%;55% d)
40%;60%
197) The Gold Monetisation Scheme, 2015 will replace the existing . However, the deposits
outstanding under
the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely
withdraw them.
a) Gold Deposit Scheme, 1995, b) Gold Deposit Scheme, 1999*, c) Sovereign Gold Bond Scheme,
d) None of these
198) Which of the following are eligible to make deposits under Gold Monetization Scheme?
a) Resident Indians & HUF, b) Trusts including Mutual Funds / Exchange Traded Funds registered
under SEBI (Mutual Fund) Regulations, c) Companies. d) All of these*
199) The minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones
and other metals) equivalent to grams of gold of 995 fineness. a) 10 gm b) 20 gm c) 30
gm* d) 40 gm
200) The maximum limit for deposit under the Gold Monetization Scheme is _______:- a) Rs. 1 lac
b) Rs. 5 lac c) Rs. 10 lac d) No limit*
201) Consequent to the reduction in the Repo rate on 29th Sept, 2016, the reverse repo rate under
the LAF will be reduced to ____ per cent, and the marginal standing facility (MSF) rate and the Bank
Rate at ____ per cent. a) 5.75; 7.75* b) 6.75; 8.75 c) 6;8 d) 7; 8
202) The Govt has launched MUDRA Bank. Which of the following is not true about the MUDRA Bank:
b) a) It will provide credit of upto Rs.10 lac to small entrepreneurs, It will act as a regulator for micro
finance institutions (MFIs).
c) It will have a corpus of Rs. 20,000 cr.
d) It will have a Credit Guarantee corpus of Rs. 3,000 cr.
e) None of these.*
203) Which of the following is an objective of Monetary Policy?
a) Regulate capital market., b) Regulate insurance trade, c) Regulate commodity markets, d)
Accelerate economic growth with price stability and stabilization of exchange rates.*
204) Which amongst the following is an opposite activity of ‘SPECULATION’?
a) Arbitrage b) Securitisation, c) Short & Long positions d) Hedging*, e) Spread

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 272 | P a g e
199) Which of the following is an Indian credit rating agency? a) CRISIL* b) SIDBI c) CIBIL
d) IBA e) IDFC
205) Which of the following terms is NOT directly related to the functioning of the RBI?
a) Ombudsman b) Marginal Standing Facility, c) SENSEX* d) Foreign Exchange Reserves,
e) None of these
206) The Government is contemplating tariff rationalization to raise India’s share in global trade to
3.5 percent by 2020. What is India share in the global trade at present? a) 1 percent b) 1.5
percent c) 2 percent*, 2.5 percent e) 3 percent
207) The Reserve Bank of India has granted ‘in-principle’ approval to _____ applicants to set up
Payments Banks under the Guidelines for Licensing of Payments Banks. a) 10 b) 11*c) 12 d) 13
208) During the validity of ____ months of the ‘in-
principle’ approval, the applicants have to comply with the requirements under the guidelines and
fulfil the other conditions as stipulated by the Reserve Bank. a) 12 months b) 15 months, c) 18
months* ___________________ d) 24 months
209) All scheduled and non-scheduled banks i.e public, private, foreign, cooperative, regional rural
and local area banks will observe public holiday on ____ and ____ Saturdays from September 1,
2015; and will observe full working days on Saturdays other than referred to as non working
Saturdays. a) 1st and 3rd b) 2nd and 3rd, c) 1st and last d) 2nd and 4th *
210) means shifting / part shifting some activities of a branch in any centre without seeking prior
approval of Reserve Bank.
a) Branch shifting b) Premises shifting, c) Para shifting of branches * d) Merger of
branches
211) The Reserve Bank has dispensed with the existing instructions permitting domestic scheduled
commercial banks (excluding regional rural banks) to undertake which of the following activities?
a) Merger b) Closure, c) Shifting or part shifting, d) Opening of extension
counters, e) All of these*
212) The new location for part shifting would have to be within ____ Kilometer / Kilometers of the
existing location. a) 1* b) 2 c) 3 d) 4
213) Banks are no longer required to report details of opening of a new place of business including
Mobile branch / Mobile ATMs / call centres, closure, merger, shifting or conversion of any existing
place of business including call centres to the Regional Office concerned. They may, however,
ensure to continue submitting within ____ days of every quarter, information relating to opening,
closure, merger, shifting and conversion of branches to RBI. a) 7 days b) 14 days* c) 21 days d)
28 days
214) The maximum unit project cost for individual micro enterprises cases is Rs. .
a) 2,00,000* b) Rs. 4,00,000, c) Rs. 6,00,000 d) Rs. 8,00,000
215) The maximum unit project cost for a group enterprise is Rs. : a) 5 lakh b) 7 lakh c)
10 lakh* d) 15 lakh
216) For loans disbursed under NULM scheme, Repayment schedule ranges from 5 to 7 years after
initial moratorium of _____ as per norms of the banks. a) 6-12 months b) 10-15
months, c) 6-18 months* d) 10-12 months
217) A self help group (SHG) or members of an SHG constituted under NULM or a group of urban
poor desirous of setting up a group enterprise for self-employment can avail benefit of subsidised
loans from any bank. The group enterprise should have minimum ________ members with a
minimum of 70 percent members from urban poor families.
a) 5* b) 7 c) 9 d) 10
218) In an effort to increase direct lending to agriculture, the target for direct lending to small and
marginal farmers under the recently revised Priority Sector Norms has been increased to
________ percent for 2015-16 and to percent for 2016-17. a) 6;7 b) 7;8* c) 7;9 d) 8;9
219) The Union Government has unleashed second generation banking reforms with a number of
measures collectively named as ________. a) Rainbow b) Indradhanush*, c) Modified
Reforms d) Revamped measures
220) These reforms include ____ point agenda to revitalize capital starved public sector banks.
a) 4 point b) 5 point c) 6 point d) 7 point*
221) The points included in reform plan include a series of proposals in alphabetical order staring
from Appointments, Bank Board Bureau, Capitalization, De-stressing, Empowerment, Framework
of Accountability and Governance reforms.
a) Appointments, Capitalization* b) Audit, Cost Cutting, c) Advances, Credit portfolio d)
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 273 | P a g e
Amalgamation, Capitalization
222) As per the reforms, the Government has decided to separate the post of Chairman and
Managing Director by prescribing that in the subsequent vacancies to be filled up the _____ will
get the designation of MD & CEO.
a) Chairman b) CEO*, c) Executive Director d) Director
223 ) The Bank Board Bureau ‘BBB’ will be a body of eminent professionals and officials and will
comprise of a Chairman and ____ more members of which ____ will be officials and _____ experts
(of which two would necessarily be from the banking sector). a) 6,2,4b) 8, 4,4 c) 7,3,4 d)
6,3,3*
224) As per the revised guidelines, the PAN Card is mandatory if the sale/purchase of Immoveable
property is valued exceeding Rs. _____. Further, PAN is also needed if properties valued by stamp
valuation authority exceeds the
amount of Rs. ____ :- Rs 5 lakh and Rs 10 lakh, b) Rs 10 lakh and Rs 10 lakh*, c) Rs 10 lakh
and Rs 15 lakh, d) Rs 10 lakh and Rs 20 lakh
225) Which of the following is correct regarding Time Deposit with a Banking Company w.r.t. PAN
Card:
a) The PAN Card is mandatory if deposits aggregating is more than Rs. 5 lac during the year.
b) The PAN Card is mandatory even if depositor has an account with Co-op Banks, Post office, Nidhi,
NBFC companies.
c) The PAN Card is mandatory if deposits aggregating is more than Rs. 50,000/- during the year.
d) The PAN Card is mandatory if deposits aggregating is more than Rs. 1,00,000/- during the year.
a) Only a & b are true* b) All b & c are true, c) Only b & d are true d) All are true.
226) In case of deposits with Post office and Saving Bank, the PAN Card is mandatory if the amount
is exceeding Rs. _______:
a) Rs.10,000 b) Rs 20,000, c) Rs.50,000 d) Discontinued*
227) In case of Sale or Purchase of securities, the PAN Card is mandatory if the contract of
sale/purchase value is exceeding Rs. ____:- a) Rs 5 lakh b) Rs 4 lakh, c) Rs 2 lakh d)
Rs 1 lakh*
228) Which of the following statement is correct regarding Opening of an account (other than time
deposit) with a Banking Company:
a) PAN Card is compulsory for all the new accounts that are being opened with the banking company.
b) In case of opening of Basic Saving Bank Account there is no requirement of PAN Card.
c) Co-operatives banks also need to comply with the guidelines on Pan.
d) All of the above*
229) As per the revised guidelines, for installation of telephone / cellphone connections, the PAN Card
is ________: a) Mandatory b) Discontinued*, c) Varies from State to State. d) None
230) In case of Hotel / restaurant bill(s), the PAN Card is required if the cash payment on account of
the bill is exceeding Rs. _____:- a) Rs 30,000 b) Rs 40,000, c) Rs 50,000* d) Rs 60,000
231) In case of cash purchase of bank Drafts / Pay orders / Banker’s cheque, the PAN Card is
mandatory if the amount aggregating exceeds Rs. _______in a day:- a) Rs 25,000 b) Rs
50,000*, c) Rs 60,000 d) Rs 80,000
232) In case of Cash deposits with the Banking Company exceeding Rs. _____ in a day, then the
PAN Card is compulsory: a) Rs 50,000* b) Rs 30,000, c) Rs 25,000 d) Rs 40,000
233) PAN Card is mandatory if the cash payment in connection with foreign travel for fare, payment
to travel agent, purchase of foreign currency is exceeding Rs. _______ at any one time:
a) 20,000 b) 50,000* c) 1,00,000 d) 5,00,000
234) In case of Mutual funds unit transactions, the PAN Card is compulsory if the payment for
purchase of mutual funds units exceeds Rs. _______:-
a) Rs 35,000 b) Rs 50,000*, c) Rs 45,000 d) Rs 60,000
235) Which of the following statement is true regarding purchase/sale of Shares, Debentures, RBO
bonds w.r.t. PAN Card:
a) PAN Card is required if the purchase/sale of shares is exceeding Rs. 1 lac per transaction.
b) PAN Card is required if a person opens a demat account.
c) PAN is mandatory in case of purchase of debentures/bonds, RBI bonds is exceeding Rs. 50,000/-
d) All of above*
236) PAN Card is compulsory if the payment of the premium is exceeding Rs. _______ in a year:-
a) Rs 20,000 b) Rs 30,000, c) Rs 45,000 d) Rs 50,000*
237) In case of Purchase or sales of goods and services, including jewellery/bullion PAN Card is
mandatory if the purchase / sale of any goods and services is exceeding Rs. _____ per transaction:-
b) Rs 1 lakh, d) Rs 2.5 lakh
238) In case of Cash cards/Prepaid instruments issued under Payment and Settlement Act, PAN Card
Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 274 | P a g e
is mandatory if the cash payment aggregating is more than ____ in a year:- a) Rs 30,000 b) Rs
40,000, c) Rs 50,000* d) Rs 60,000

Note: (ANSWER is * )

BEST OF LUCK

Compiled by Sri Sanjay Kumar Trivedy, Divisional Manager, Govt. Link Cell, Nagpur 275 | P a g e