How can I exchange old Rs 1000 and Rs 500 notes?

Modi has taken a bold and effective step to curb black money. If you don’t have a black money, it should not bother you much. Your hard earned money will always be yours. You have enough time and opportunities to exchange the old Rs 500 and Rs 1000 notes to legally valid currency notes.

1. You can deposit in your account in any bank or post starting from 10/11/2016 to 30/12/2016. There is no limit for this deposit.
2. Once you deposit your Rs 1000 and Rs 500 notes, you can withdraw in legally valid currency notes up to Rs 10000 per day and Rs 20000 per week from the bank or post offices.
3. One can exchange the notes at banks or head and sub post offices producing identification documents like PAN, EPIC, Adhar, Passport etc. This kind of exchange of notes is capped at Rs 4000 upto 24/11/2016 and Rs 20000 from 25/11/2016 to 30/12/2016.
4. Even if you can not exchange your old Rs 1000 and Rs 500 notes during the given period up to 30/12/2016, you can exchange notes at specified RBI offices with a declaration up to end of this financial year.
5. One can withdraw up to only Rs 2000 at ATMs as of now from 10/11/2016 and it will be increased to Rs 4000 soon.

GK for Bank Exams: Weekly Digest: Oct 30 to Nov 5, 2016

AP tops in energy efficiency

• The World Bank has ranked A.P. as number one in ‘Energy Efficiency Implementation Readiness’ with followed by Rajasthan, Karnataka and Maharashtra
• World bank report titled: ‘India’s State Level Energy Efficiency Implementation Readiness”

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GST Updates: Council fixes 4-level GST rate structure

• Goods and Services Tax (GST) will be levied at multiple rates ranging from 0 per cent to 28 per cent.
• Ultra luxuries, demerit and sin goods, will attract 28 per cent GST
• Two standard rates of 12 per cent and 18 per cent would be applied on the bulk of the goods and services. This includes fast-moving consumer goods.
• Lowest slab of 5 per cent will be for items of common consumption.
• Other necessary items including food will not have any tax.

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Google ties up with ASI for virtual tour of monuments

Google has tied up with the Archaeological Survey of India(ASI) to develop 360 degree virtual tours of 280 monuments across the country

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RBI allows banks to raise funds via masala bonds

• The Reserve Bank of India has allowed Indian banks to raise funds through issuance of rupee-denominated bonds overseas (also called masala bonds)
• Banks can issue perpetual debt instruments qualifying for inclusion as Additional Tier-1 capital under the extant Basel-III capital regulations.
• They can also issue long-term rupee-denominated bonds overseas for financing infrastructure and affordable housing.

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IDFC Bank using micro-ATMs

A micro-ATM at a glance, it looks like a large tablet. It has an attached biometric scanner and thermal printer and is Aadhaar-enabled and interoperable. It can do everything a regular ATM can — and more. Using multiple identifiers — whether it is your mobile number, Aadhaar number, debit card number or bank account number, one can perform all basic banking transaction, do an account opening, deposit cash into any bank account, withdraw money from your account, undertake balance enquiry, get your statements, make funds transfers, remittances, etc

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IPPB to synergie with financial services biz of India Post

• Payments banks can accept demand deposits — current deposits and savings bank deposits from individuals, small businesses and other entities, but with a condition that balances do not exceed Rs. 1 lakh. They can neither accept fixed deposits and NRI deposits nor can they give loans.
• The primary objective of a payment banks is to further the cause of financial inclusion by providing small savings accounts and payments/remittance services to migrant labour workforce, low-income households, small businesses.
• The India Post Payments Bank (IPPB) is planning to create a mechanism whereby balances over this limit get automatically transferred to the Post Office Savings Bank (POSB).
• Payments banks are planning to overcome these drawbacks using tie up with other banks. The full-time banks are also interested in marketing their loans and other products through payment banks.
• Reliance Industries and State Bank of India, Kotak Mahindra Bank and Airtel Payments Bank, ICICI Bank and FINO PayTech to foray into the payments bank space as joint ventures.

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Ease of Doing Business Reforms Ranking 2015-16

• Department of Industrial Policy and Promotion (DIPP) and the World Bank conducted the “Ease of Doing Business Reforms Ranking 2015-16.
• Andhra Pradesh and Telangana jointly topped in the ranking. 

No change in Small Saving Schemes interest rates for Q2 FY 2016-17

Government had decided to set the interest rate of Small Saving Schemes every quarter from FY 2016-17. Accordingly the interest rate of Small Saving Schemes for quarter 2 of FY 2016-17 is now announced. There is no change interest rates for the quarter 2 of financial year 2016-17. Sukanya Samriddhi and Senior Citizen Saving Schemes will fetch the highest rate of interest at 8.6% per annum followed by 5 year National Saving Certificates and Public Providend Funds at 8.1% per annum.

Instrument	Rate of interest w.e.f. 01.04.2016 to 30.6.2016	Rate of interest w.e.f. 01.07.2016 to 30.9.2016	Compounding frequency
Savings Deposit	4.0	4.0	Annual
1 Year Time Deposit	7.1	7.1	Quarterly
2 Year Time Deposit	7.2	7.2	Quarterly
3 Year Time Deposit	7.4	7.4	Quarterly
5 Year Time Deposit	7.9	7.9	Quarterly
5 Year Recurring Deposit	7.4	7.4	Quarterly
5 Year Senior Citizens Savings Scheme	8.6	8.6	Quarterly and paid
5 year Monthly Income Account Scheme	7.8	7.8	Monthly and paid
5 Year National Savings Certificate	8.1	8.1	Annual
Public Provident Fund Scheme	8.1	8.1	Annual
KisanVikasPatra	7.8 (will mature in 110 months)	7.8 (will mature in 110 months)	Annual
SukanyaSamriddhi Account Scheme	8.6	8.6	Annual

RBI Governor's power to decide monetary policy rates clipped

RBI decides the monetary rates to control the inflation. RBI governor had the final say it this matter till date. He was assisted by RBI’s Monetary Policy Department and Technical Advisory Committee, but he was not bound to take decisions based on this advice.

But the recently passed Finance Bill 2016 a.k.a Union Budget 2016 which also included an amendment to the RBI Act clipping the central bank governor’s powers to set monetary policy.

A six-member Monetary Policy Committee will be formed for this purpose. The committee will three members nominated by the government(other than any government officials) and three members from RBI.  The RBI Governor will chair the committee. Decisions will be taken by majority vote with each member having a vote. The governor, however, will not enjoy a veto power to override the other panel members, but can cast a vote in case of a tie. The members of the committee will be appointed for 4 years without a provision for reappointment.

Search-cum-Selection Committee under Cabinet Secretary, along with RBI Governor, Economic Affairs Secretary and three experts in the field of economics or banking or finance or monetary policy as its members will select the government nominees to the Monetary Policy Committee.

Monetary Policy Committee will set interest rates to keep retail inflation within targets which is set by the government every five years.

All you need to know on Priority Sector Lending Certificate

Priority Sector Lending is a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups. RBI specifies how much should be the Priority Sector Lending out of the total credit given by a bank. There are also are the different categories under priority sector viz agriculture.

Some lenders think the priority sector lending is not profitable to them. The profit in the form of the interest margin and other charges could be lesser when the cost involved in the form of assessments, small ticket sizes, recovery efforts and poor alternative channel penetration in these segments are considered. In other way round, some of the lenders like Regional Rural Bank and Local Area Banks are lending almost hundred percent of their advances to priority sectors. To make those who give more credit to the priority sectors incentivized and pass on the liquidity from those not have met the priority sector advances to those who have achieved, a new form of certificate called priority sector lending certificate (PSLC) is introduced.

A lender with surplus priority sector will issue PSL certificates. A market would be opened up for these certificates for buying and selling. In the PSLC market, the banks deficient in priority sector lending target can buy certificates to compensate for their shortfall in lending. 

Types of PSLC: As we have different targets for different categories under priority sector, the same is also reflected in the types of the PSLCs. A lender who is having surplus of Agriculture lending can issue and Agriculture PSLC and a lender who has shortfall in agriculture lending can buy this to reach the target. Thus he can avoid depositing in low yielding RIDF(Rural Infrastructure Development Fund). There are four types of PSLCs: Agriculture, Small and Marginal Farmers, Micro Enterprises and General. 

Who Proposed: Raghuram Rajan Committee on Financial Sector Reforms.

Trading platform- provided through the CBS portal of RBI that is e-Kuber.

Credit Risk: By selling PSLCs, risk underlying in such advances will not pass on to another bank. Credit risk will remain with the original lender. 

Amount eligible for issue: If a bank reaches its target of priority sector lending can issue PLSC to the tune of 50 percent of previous year’s PSL achievement.

Size of the PSLC: a standard lot size of Rs 25 lakh and multiples thereof.

Expiry of PSLC: All PSLCs will expire by March 31st irrespective of the date it was sold.

How will  it help the nation?: If Banks find priority sector lending is unprofitable, there will be a high price for the certificates in the market and it is expected that more lenders will be attracted towards priority sector lending. If the price is low, it is the scenario where all the lenders have met the target under priority sector lending. Both are good for the needy population.

Benefit to the banks: Banks with shortfall of priority sector obligations may be allowed to buy the PSLC and submit it towards fulfillment of their target. Banks with surplus of the priority sector targets can sell the certificates to get the money to invest somewhere else. 

How it works: (An example by RBI)-  Bank A may sell PSLCs with a nominal value of Rs 100 crores to Bank B on some date of the FY 2016-17. Bank B will reckon Rs 100 crore towards its priority sector achievement as on the reporting dates till March 31, 2017, while Bank A will subtract the same from its achievement figures for the respective reporting dates. The PSLC will expire by March 31, 2017. (Reporting dates are end of the every quarter)