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Types of Money

Commodity Money Commodity money value is derived from the commodity out of which it is made. The commodity itself represents money, and the money is the commodity. For instance, commodities that have been used a Medium of exchange include gold, silver, copper, salt, peppercorns, rice, large stones, etc.Representative Money Representative Money is money that includes token coins, or any other physical tokens like certificates, that can be reliably exchanged for a fixed amount/quantity of a commodity like gold or silver.Fiat Money Fiat money, also known as fiat currency is the money whose value is not derived from any intrinsic value or any guarantee that it can be converted into valuable commodity (like gold). Instead, it derives value only based On government order (fiat)Commercial Bank Money Commercial bank money or the demand deposits are claims against financial institutions which can be used for purchasing goods and services.Reserve Money (M 0)Currency in circulation + Bankers‘ ‘deposits with the RBI + ‘Other’ deposits with the RBI = Net RBI ‘credit to the Government + RBI credit to the commercial sector + RBI's claims on banks + RBI's net is foreign assets + Government’s currency liabilities to the public - RBI's net non-monetary liabilities.M1Currency with the public + Demand deposits with the banking system + 'Other' deposits with the RBIM2M1 + Savings deposits of office savings banks.M3M1+ Time deposits with the banking system= Net bank credit to the Government + Bank credit to the Commercial sector + Net foreign assets of the banking sector + Goveinment’s currency liabilities to the public - Net non-monetary liabilities of the banking sector.M4M3 +All deposits with post office savings banks (excluding National Savings Certificates)The Reserve Bank established Bhartiya Reserve Bank Note Mudran Private Limited (BRBNMPL)in February 1995 as a wholly-owned subsidiary to augment the production of bank notes in India and to enable bridging of the gap between supply and demand for bank notes in the country.#ARCHANA

Words list

wake-up call (noun) – something which alerts a person to a problem and makes him/her to do some remedial action.press ahead (phrasal verb) – to continue doing something committedly even if it is a  difficult action.harvest (verb) – collect, gather, obtain (resources for future use).behavioural microtargeting (noun) – the marketing technique/strategy which collects user/customer’s datas with behavioral characteristics and then use them to influence that behavior through hyper-targeted advertising.psychographics (noun) – it is defined as a qualitative technique used to describe consumers on psychological characteristics (on consumers’ activities, interests, and opinions).whistle-blower (noun) – one who reveals others’ illegal activities in public or to the government/authority.set off (phrasal verb) – cause, prompt, trigger.storm (noun) – disturbance/trouble, commotion; controversy.revelation (noun) – disclosure, surprising fact, declaration/announcement, report.alt-right (noun) – right-wing, conservative, rightist.sway (verb) – control, influence, affect/persuade.undercover (adjective) – covert, secret, confidential. (Undercover report is a type of journalism in which a reporter tries to pose as someone friendly to get to the bottom of the truth).dubious (adjective) – suspicious, untrustworthy, unreliable.honey trap (noun) – the strategy of using attractive people to entrap (tempt) or get information from someone (Courtesy: The Hindu).discredit (verb) – disgrace/dishonour; disprove, invalidate.consent (noun) – agreement, assent, acceptance.tailor (verb) – adapt, adjust, modify/change (for a particular purpose).slander campaign (noun) – a dirty campaign in an effort to ruin a reputation of the opponents with false blames and misrepresenting information.propaganda (noun) – information, promotion, publicity.potent (adjective) – powerful, strong, effective.corrosive (adjective) – destructive, damaging, harmful.cocktail (noun) – a mixture of dangerous factors.scrape (verb) – collect, amass, gather.come to light (phrase) – reveal, disclose, expose.prickly (adjective) – problematic, awkward, tricky/sensitive.implications (noun) – consequence/outcome, ramification, repercussion.drag one’s feet (phrase) – delay, put off, defer/postpone (action).opt in - choose to participate in somethingopt out - choose not to participate in something#FancyJ

RC

The controversy is a wake-up call to press ahead with a robust data protection law The world has just learned how a data analytics firm, Cambridge Analytica, harvested the data of 50 million Facebook users and used that information to feed strategies such as ‘behavioural microtargeting’ and ‘psychographic messaging’ for Donald Trump’s presidential campaign in the U.S. Chris Wylie, a former CA employee-turned-whistle-blower, set off a storm with revelations of how the company had deployed a ‘psychological warfare’ tool for alt-right media guru Steve Bannon to try to sway the election in Mr. Trump’s favour. CA chief executive Alexander Nix, who was suspended a few days ago following an undercover report by a British TV broadcaster, said the company has used other dubious methods in projects worldwide — including honeytraps to discredit clients’ opponents. The combination of using personal data without consent and tailoring slander campaigns, fake news and propaganda to discovered preferences of voters is a potent and corrosive cocktail. Facebook has said its policies in 2014, when a personality profiling app was run on its platform, permitted the developer to scrape data not only from those who downloaded the app but also from the profiles of their Facebook ‘friends’. Yet it did not make sure the data were destroyed by the app’s developer Aleksandr Kogan, a Cambridge University academic, nor by CA itself when it came to light that Mr. Kogan had sold the data to CA, a third party. Facebook founder and CEO Mark Zuckerberg has offered an apology and expressed willingness to cooperate with inquiries and potentially open up Facebook to regulation. This episode has brought to light several issues that need to be addressed. First, companies have been collecting data and tailoring marketing campaigns accordingly. The issue here is particularly prickly because politics and elections are involved. Second, regardless of whether what Facebook and CA did was legal or not, something is broken in a policy environment in which the data of millions are taken and used when only 270,000 people knowingly or unknowingly gave consent. Third, technology is evolving at a rapid pace, raising the question whether laws need to be reframed mandating an opt-out approach universally rather than an opt-in approach. Individuals often share their data without being aware of it or understanding the implications of privacy terms and conditions. Fourth, there must be clear laws on the ownership of data and what data need to be protected. Personal data cannot be the new oil. Individuals must own it, have a right to know what companies and governments know about them and, in most cases, that is, when there are no legitimate security or public interest reasons, have the right to have their data destroyed. The CA issue is a wake-up call for India; the government is still dragging its feet on framing a comprehensive and robust data protection law.#FancyJ

SIDBI

Small Industries Development Bank of India (SIDBI) was set up on April 2, 1990 under an Act of Indian Parliament. It has its headoffice in Lucknow, Uttar Pradesh. It was set up to promote, finance and develop the Micro, Small and Medium Enterprise (MSME)sector and for coordinating the functions of the institutions engaged in similar activities.Mission of SIDBI:“To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system”.The four basic objectives of SIDBI are:FinancingPromotionDevelopmentCo-ordinationfor orderly growth of industry in the small scale sector.Associates of SIDBI:Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)Government of India and SIDBI set up the CGTMSE in July 2000 to provide credit guarantee support of loans up to Rs. 100 lakh toMSMEs under its Credit Guarantee Scheme (CGS).SME Rating Agency of India Ltd. (SMERA)SIDBI along with some leading banks set up SMERA in September 2005 to provide comprehensive, transparent and reliable ratings andrisk profiling.India SME Technology Services Ltd. (ISTSL)ISTSL was set up in November 2005 which provides a platform for MSMEs to tap opportunities at the global level for acquisition ofmodern technologies.India SME Asset Reconstruction Company Ltd. (ISARC)ISARC is the country’s first MSME focused Asset Reconstruction Company set up for the resolution of non-performing assets (NPA)which would facilitate greater and easier flow of credit from the banking sector to the MSMEs.Delhi Financial Corporation (DFC)DFC has been set under ‘The State Financial Corporation Act, 1951 with objectives to promote, finance and develop industries / serviceactivities in the small and medium scale sectors including commercial transport in the NCT, Delhi and UT, Chandigarh.Facts about SIDBIThe business domain of SIDBI consists of Micro, Small and Medium Enterprises (MSMEs).It was set up as a wholly owned subsidiary of Industrial Development Bank of India, but now is an independent financial institution.Its branches are available in all major clusters of the country.SIDBI is in the top 30 Development Banks of the World according to the ranking of The Banker, London.SIDBI also provides financial support to National Small Industrial Corporation (NSIC) for providing leasing, hire-purchase, andmarketing support to the industrial units in the small-sector.#FancyJ

MUDRA

Micro Units Development and Refinance Agency Bank (MUDRA Bank) was set up as a public sector financial institution on 8 April2015 under Pradhan Mantri MUDRA Yojana (PMMY). It is set up to provide loans at low rates to Micro-Finance Institutions (MFIs) andNon-Banking Financial Companies (NBFCs) which then provide credit to MSMEs.Formation of MUDRA Bank:The Non-Corporate Small Business Sector (NCSBS) forms important part of Indian Economy.They feed large local and international value chains as well as domestic consumer markets as suppliers, manufacturers,contractors, distributors, retailers and service providers.But the NCSBS have a little growth due to the lack of financial support by the banks.Most NCSBS operates as unregistered enterprises. Because of this they do not maintain their proper book of transactions andthus are not covered under taxation areas. And this is the reason that the banks hesitate to provide loans to these NCSBS.This became the genesis of MUDRA Bank which will develop and refinance all MFIs.Three categories have been identified in which the loans will be disbursed by the MUDRA Bank. These are:Shishu: Under this, loans up to Rs 50,000 will be provided.Kishore: Under this, loans up to Rs 5 lakh will be provided.Tarun: Under this, loans up to Rs 10 lakh will be provided.Government has decided to provide an additional fund of Rs 1 trillion to the market and will be allocated as 40% to Shishu, 35% toKishore, and 25% to Tarun.Roles and Responsibilities of MUDRA:Laying down policy guidelines for micro enterprise financing business.Registration, supervision and rating of MFI entities.Guaranteeing the loan/credit to the MSMEs.Ensure proper client protection principles and methods of recovery.Supporting development & promotional activities in the sectorCreating a good architecture of Last Mile Credit Delivery to micro businesses under PMMY.Some important facts:MUDRA bank is not a physical bank.Eligible entities can apply for MUDRA Bank loan under PMMY in NBFCs, MFIs, Rural Banks, District Banks, Nationalize Banks, Private Banks, Primary Lending Institutions and other intermediaries.Any person who is eligible and having the need of loan of up to Rs 10 lakhs can approach for loans under PMMYIt will not refinance agriculture sector under PMMY but the traders of vegetables & fruits are covered under MUDRA BankSchemes.The bank is set up as a subsidiary of the Small Industries Development Bank of India (SIDBI), and later it will be converted to aseparate institution.The bank was decided to act as regulator of MFIs, but later the decision was withdrawn and it will be done by RBI.There is no fix interest rate in MUDRA loan; it will vary from bank to bank.It was launched by Prime Minister Narendra Modi in New Delhi.#FancyJ

Lead Bank Scheme

The Lead Bank Scheme was introduced in 1969 to provide lead roles to individual banks (both in public sector and private sector) forthe districts allotted to them.The Lead Bank Scheme was introduced by RBI on the basis of the recommendations of both the Gadgil Study Group and Banker’sCommittee (Nariman Committee). The studies by the committees found that the rural areas were not able to enjoy the benefits ofbanking. Commercial banks did not have adequate presence in rural areas and also lacked the required rural orientation.So a bank (public or private) was given some area in which that bank had to play a lead role in providing financial services to thepeople, making them aware about the banks and various benefits of banks and also generating trust among people so that they deposittheir money without any fear of loss or fraud. So in this way, all the districts in the country have been allotted to various banks. The lead bank also acts as a leader for coordination activities and services of all financial institutions in that area.For this a Lead Bank Officer (LBO) now designated as Lead District Manager is also appointed. Role of Lead District Manager: Collection of various data from Scheduled Commercial Banks, Regional Rural Banks, Co-operative Banks, other banks and various government agencies.Monitoring the implementation of Annual Credit plan and various Government Sponsored Schemes in the district.Along with implementation of Annual Credit plan, he should also provide requisite infrastructure to achieve the plan effectively. He should also play a leading role in poverty alleviation programmes launched by the State/Central GovernmentPreparation of Annual Credit Plan for the district. In all the states, State Level Bankers’ Committees (SLBC) are formed in order to coordinate and implement programmes and policiesby all the financial institutions operating in the State. The meetings of SLBC are held quarterly in which there is interaction among thevarious banks in the State on the one hand and between the banks and the State Government authorities on the other.  #Saarumathi

BRBNMPL

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)is one of the wholly owned subsidiaries of the Reserve bank ofIndia (RBI), others being DICGC, NABARD and NHB. It was established on 3rd February 1995 with a view to produce bank notes inIndia and enable RBI to bridge the gap between the supply and demand for bank notes in the country. The BRBNMPL has beenregistered as a Private Limited Company under the Companies Act 1956 with its Registered and Corporate Office situated at Bangalore.The company manages 2 Presses:Mysore in KarnatakaSalboni in West BengalThe present capacity for both the presses is 16 billion note pieces per year on a 2-shift basis. Both the presses have installed the latest“state of the art” Technology in bank note printing. The machinery at Mysore Site has been supplied by Switzerland and that of Salboniby Japan.Vision of the BRBNMPL is “To emerge as a Global Leader in pursuit of excellence providing the best in Design, printing, services andsupply of banknotes and other security documents.”Mission of BRBNMPL:To produce bank notes conforming to international standards set by Central Banking and monetary authorities of the world and makesthem available in adequate quantities to the Reserve Bank of India at competitive prices.Establishment of Bharatiya Reserve Bank Note Mudran Private Limited:The bank note printing in India started in 1928 with the establishment of India Security Press at Nashik by Government of India. Thesecond bank note printing press was established in Dewas (Madhya Pradesh) in 1975 by Government of India.But with the increase in population of the country and economic activity, demand for bank notes increased. So, the Government of Indiadecided to establish two new bank note printing presses.The project for setting up new printing presses was started by the Government of India which was then transferred to RBI in December1989. The BRBNMPL was incorporated as a Private Limited Company on 3 February 1995.Considering the magnitude of the project, the Company decided to establish the presses in two phases viz, Phase I for establishing aMini Press with a single production line at each site. The Phase II involved establishment of the Main Presses with 7 lines of productionin Mysore and 8 lines of production in Salboni.#Saarumathi

NEGOTIABLE INSTRUMENTS

Negotiable instrument is a document which guarantees the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document. A negotiable instrument can be transferred from one person to another.Negotiable Instruments Act, 1881 is an Act to define and Law relating to negotiable instruments. The act gives the definitions of all the related terms. The act also deals with the offence pertaining to dishonor of cheque on account of insufficiency of funds in the drawer’s account.According to Section 13 of the Negotiable Instruments Act, 1881, “A Negotiable Instrument means a promissory note, bill of exchange or cheque payable either to order or to bearer.”A “promissory note” is an instrument in writing that promises to pay a definite sum of money from one party to another party either on demand or at a specified future date. The person who makes the Promissory Note and promises to pay is called the drawer or maker and the person to whom the payment is to be done is called the drawee or payee. So there are two parties in a promissory note.It bears the sign of the drawer. It contains a dateIt contains a definite amount plus the rate of interest and this total sum will be paid to the payee.It contains the required stamp.The promise to pay should be unconditional. For e.g. if I have written in the promissory note that it will be payable after my marriage, then addition of this condition does not make it a promissory note.It should be returned back to drawer after the payment.An example of promissory note:                            A “bill of exchange” is an instrument in writing that contains an order to pay a definite sum of money from one party to another party either on demand or at a specified future date with an intermediary to pay the sum. So there are three parties in a bill of exchange. But all may not be distinct persons as a drawer may pay on himself payable to his own order.It is primarily used in international trade.It bears the sign of the drawer.The order to pay should be unconditional.It contains a dateIt contains a definite amount that is to be paid unlike in promissory note which contains rate of interest also.It contains the required stamp.In case of dishonor, a notice is sent to the drawer which is in contrast with promissory note.An example of bill of exchange:                                                  A “cheque” is bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and cheque also includes the electronic image of a truncated cheque and a cheque in the electronic form. ‘a cheque in the electronic form’ means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature and asymmetric crypto system.‘a truncated cheque’ means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment. After the generation of an electronic image for transmission, the image substitutes the physical movement of the cheque in writing.An example of cheque:                                                                     The government has notified the Negotiable Instruments (Amendment) Bill, 2015 which allows filing cheque bounce cases in a court at a place where the cheque was presented for clearance and not the place of issue so that there is a fast prosecution of offenders.#MONISHA

ATM

Automated Teller Machine is a computerized machine that provides the customers of banks the facility of accessing their account for dispensing cash and to carry out other financial & non-financial transactions without the need to actually visit their bank branch. Various types of ATMsOn Site ATM:This type of Atm-is situated either within the branch premises or in very close proximity of the branch.Offsite ATM:Is not situated within the branch premises but is located at other places, such as malls, airports and petrol stations etc...Worksite ATM:It is located within the premises of an organisation and is generally meant only for the employees of the organisation.White Label ATMs (WLAs):ATMs set up, owned and operated by non-banks are called White Label ATMs. Non-bank ATM operators are authorized under Payment & Settlement Systems Act, 2007 by the RBI. However in White Label ATMs acceptance of cash deposits at the WLAs is not permitted at present. But White label ATM doesn’t have such Bank logo, hence called White label ATMs.Any non-bank entity with a minimum net worth of Rs.100 crore, can apply for white label ATMs. (not just NBFC, any non-bank entity can apply.)Tata Communications Payment Solutions Limited =the first company to get RBI’s permission to open White label ATMs.They started their chain under brandname “Indicash”.Other White label= Muthoot Finance, Srei Infra., Vakrangee Software, Prizm Payments, AGS. More than 15 companies given such permission.ATMs will be setup in the rural and semi-urban areas. = more access to ATM= financial inclusion. RBI requires White label-ATM companies to install machines in the ratio ofTwo ATMs in (tier 3 to 6 place) : One ATM in (tier 1-2 place). Brown Label ATM: 'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.ATM has logo of that bank (which has outsourced this work).They’ve no such compulsion to open a few ATMs in (tier 3 to tier 6) areas. Free transactions at ATMs With effect from November 01, 2014, a bank must offer to its savings bank account holders a minimum number of free transactions at ATMs, However It is not applicable to Basic Savings Bank Deposit Accounts (BSBDA) as withdrawals from BSBDA are subject to the conditions associated with such accounts. Bank’s own ATMs at any location:Banks must offer their savings bank account holders a minimum of five free transactions (including both financial and non-financial) in a month. Transactions at any other banks’ ATMs at Metro locations:In case of ATMs located in six metro locations, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, banks must offer their savings bank account holders a minimum of three free transactions (including both financial and non-financial transactions) in a month. Failed ATM/WLA transaction: The customer should lodge a complaint with the card issuing bank at the earliest. This process is applicable even if the transaction was carried out at another bank’s/non-bank’s ATM. Banks have been mandated to resolve customer complaints by re-crediting the customer’s account within 7 working days from the date of complaint. However if the complaint raised but the customer is not resolved Banks have to pay compensation of Rs. 100/- per day for delays in re-crediting the amount beyond 7 working days from the date of receipt of complaint for failed ATM transactions.The compensation has to be credited to the account of the customer without any claim being made by the customer. If the complaint is not lodged within 30 days of transaction, the customer is not entitled for any compensation for delay in resolving his / her complaint. static: Hongkong and Shanghai Banking Corporation(HSBC) introduced the ATM concept in India in 1987. The first ATM was set up in Andheri East, Mumbai. ICICI is the first bank to provide mobile ATM. First bank in india to launch talking ATMs for differently-able person- Union bank of india First Aadhaar-based ATM launched by- DCB Bank #ARCHANA

DEMAT ACCOUNT

Demat account is an account in which the shares and securities are held in dematerialized form i.e. electronically without any physical papers held.It is not like your savings or current account in which the cash is held and cards are issued. For getting a demat account open, one needs to go to one of the Depository Participants or DPs. DPs could be banks, brokers or financial institution that have been allowed to provide this service. The Dps act as intermediary between central depository and the investor.Some facts about Demat Account:To carry out transactions in the stock market, one should get open a demat account.To open a demat account, KYC procedure is also followed.Multiple demat accounts can be opened.Demat accounts are held by a single person i.e. no joint accounts can be operated.There is no need of any minimum balance in demat account.Benefits of having Demat Account:When the transactions are done, like buying or selling securities in the market, they get automatically updated.It provides paperless transactions.It provides security in holding securities in the account.Provides reduction in transaction cost.No stamp duty on transfer of securities.Traders can work from anywhere.#MONISHA

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