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.

Get ready to be a PO in SBI: Notification for 2200 vacancies out

A great news for those who are preparing for Bank PO Exams. India's biggest bank has notified for the recruitment of 2200 Probationary Officer posts.

Online registration starts from 04-05-2016 and will be open till 24-05-2016. Call letters can be downloaded from 14-06-2016 for the preliminary examination that are being held on 2nd, 3rd, 9th and 10 July 2016. Result of this test will be declared within 8 days, that is on 18-06-2016. Main exam will be held on 31-07-2016. You can expect your result on 30-09-2016, on the same day SBI's Chairman Arundhati Bhattaharya is getting retired. 

Detailed notification can be downloaded here

SBI has not given you any leisure time. This could be the fastest PO recruitment drive in the history of SBI. Start the final preparation now. All the best. 

For the changed examination pattern read my article 

SBI PO exam pattern has changed

SBI has brought some major changes in the PO examination this year. Though the notification for the recruitment is not yet announced, the changes in the PO Mains Examination is announced on their website. 

There will be 3 phase process as earlier. Preliminary Examination will be a screening test and there are no changes in the test. But the mains exam has got a significant modification with sectional cut-off timings.

Phase-I: Preliminary Examination:

Sr.No.	Name of test	No. of Questions	Marks	Duration
1	English Language	30	30	Composite Time of 1 hour
2	Quantitative Aptitude	35	35
3	Reasoning Ability	35	35
	Total	100	100

Phase - II: Main Examination

Main Examination will consist of Objective Tests for 200 marks and Descriptive Test for 25 marks. Both the Objective and Descriptive Tests will be online. Candidates will have to answer Descriptive test by typing on the computer, that means you need to know typing an essay and a letter, not writing them using pen and paper. (So I don't need to face the questions on blue ink pen or black  ink pen) Immediately after completion of Objective Test, Descriptive Test to be answered.

The objective test of 3 hours duration consists of 4 Sections with 155 questions for total 200 marks. The objective test will have separate timing for every section (Note this change). The candidates are required to qualify in each of the Tests by securing passing marks, as decided by the Bank.

Sl. No	Name of the test	No. of Qs	Max. Marks	Duration
1	Reasoning and Computer Aptitude	45	60	60 minutes
2	Data Analysis and Interpretation	35	60	45 minutes
3	General Awareness about Economy/ Banking	40	40	35 minutes
4	English Language	35	40	40 minutes

These sectional timings are reasonable and most of the candidates will be attempting with same timing even if there were no such sectional timings. Hence, this should not bother a prepared candidate.

Descriptive Test: The Descriptive Test of 30 minutes duration with 25 marks will be a Test of English Language (Letter Writing and Essay). You need to type them. If you are dependent on others to apply for the examinations due to your poor typing skills, please join a typing class before joining PO coaching class.

Phase - III: Group Discussion and Interview:  Pradhan Mantri no interview yojana is applicable only to clerical recruitments. Hence, get ready for a group discussion (20 Marks) and interview (30 marks) with combined marks of 50. Final selections will be based on your score in Phase II and Phase III.

Number of Attempts: General candidates will have 4 chances, PBC, PWD and will have 7 chances and for SC/ST there will be no cap on maximum attempts. The number of chances will be counted from the examination held on 18.04.2010. If you had appeared before 2010, no need to count those attempts. Appearing in Preliminary Examination will not be counted as a chance.

Prepare well. All the best. 

Compare insurance online without sharing your mobile number

Comparing insurance premiums and features online without sharing the mobile number and the email was one of the toughest jobs for me until I found these websites with some extra research. I shared my contact details with some online insurance brokers for my car insurance and with a reputed insurance company for a term insurance plan. I had at least 20 calls every day for more than a week. This made me search for online insurance comparing sites which do not ask for the contact details. I found these sites which could be useful to you:

1. Policy Litmus is the best site among them. Though the search result was lesser than others the number of results shows was fair enough. This was the fastest to return the result during my search. We Care insurance and Policy Litmus are one and the same

2. Insurance Zone is another site which you can use for doing research for your insurance. I gave some extra details for understanding the policy being compared. Though it asks for contact details like mobile number and email id, these are optional.

3. Zibika is another website for comparing insurance without sharing your contact details. I found this is slowest among three but the result returned were good enough to wait for. 

Comparing the cost of the insurance on these sites should not be the final criteria for your decision, There are several other aspects which could affect later stage at the time of medicals, underwriting or claim settlement.  

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)