Response To Application Concerning Failure To Furnish Financial: Fill & Download for Free

Issues, Challenges and Empowerment of MSMED ActDefinition of MSMEThe Micro, Small & Medium Enterprises (MSMEs) are defined in India under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 on the basis of capital investment made in plant and machinery, excluding investments in land and building. It is classified under two classes :1. Manufacturing Enterprises: The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprises are defined in terms of investment in Plant & Machinery.2. Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.Criteria for applying for MSME RegistrationMSME registration or Udyog Aadhaar can be obtained by any type of business entity. Proprietorships, Hindu Undivided Family, Partnership Firm, One Person Company, Limited Liability Partnership, Private Limited Company, Limited Company, Producer Company, any association of persons, co-operative societies, or any other undertaking can obtain MSME registration in India. Small businesses having MSME registration enjoy various benefits under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, it is recommended that all small businesses obtain MSME registration or Udyog Aadhaar after starting up.The investment limits for both the enterprises are notified vide S.O 1642(E) dated 29-09-2006 and further amendments in February 2018 are brought in effect, are as under:The Central Government may, by notification, vary turnover limits, which shall not exceed thrice the limits specified in clause (a), (b) of sub-Section 1 of MSMED Act, 2006 for the purposes of development of micro, small and medium enterprises.The turnover criteria can be pegged with reliable available figures e.g. in GST Network (GSTN) and other methods of ascertaining. This will help in having non-discretionary, transparent, and objective criteria. It will eliminate the need for inspections and make the classification system progressive and evolutionary.It will also help in overcoming uncertainties associated with classification based on investment in plant & machinery and equipment and employment. It will also improve the ease of doing business. It will provide flexibility to the Government to fine-tune the classification of MSMEs in response to changing economic scenarios without resorting to an amendment of the MSMED Act.Major Impact/benefitsThe change in definition by keeping a turnover criterion will:help in having non-discretionary, transparent, and objective criteria, and will eliminate the need for inspections.make the classification system progressive and dynamic.improve the ease of doing business.provide flexibility to the Government to fine-tune the classification of MSMEs in response to changing economic scenario without resorting to the amendment of MSMED (Micro, Small & Medium Enterprises Development) Act frequently.Who administrates MSMEThe Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex body for the formulation and administration of rules, regulations, and laws relating to micro, small and medium enterprises in India. Its headquarters are in New Delhi. The Cabinet Minister of Micro, Small, and Medium Enterprises is Mr. Nitin Gadkari and the Minister of State is Mr. Pratap Chandra Sarangi.Benefits of MSME registration1. Collateral Free loans from banks2. A hefty 50% subsidy on Patent registration3. 1% exemption on the interest rate on overdraft4. Eligible for Industrial Promotion subsidy5. Protection against delayed payments6. Concession in electricity bills:7. Reimbursement of ISO Certification chargesWhen to apply for MSME registration?Obtaining MSME registration or Udyog Aadhaar is not mandatory and is at the sole discretion of the Entrepreneur. However, it is recommended that the businesses should obtain MSME registration to enjoy various benefits like protection against delayed payments under the MSMED Act and to resolve the cases under the MSEFC portal.Protection by Government to MSME registered Companies1. State wise resolution of cases: Micro and Small Enterprises Facilitation Council (MSEFC) portal has been launched. The portal facilitates implementation of the delayed payment provisions of the MSMED Act, 2006, and assists in the monitoring of delayed payment cases. Most of the States have uploaded the information regarding delayed payment cases on the MSEFC portal.2. Delayed payment clause: Delayed Payment is governed by the provision in The MSMED Act. Ministry has also launched a delayed payment monitoring portal, namely “MSME SAMADHAN”.Its salient features are as under1. The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 (Section 15-24): It deals with the issues relating to the Delayed Payments to Micro and Small Enterprises (MSEs) by the buyers(buyers may range from large enterprises to Government or PSUs, etc.) to the MSE supplier for the supplies made by them. In the case of delay in payment beyond 45 days, MSEs suppliers may approach the Micro and Small Enterprises Facilitation Council (MSEFC) constituted under the Act in all States/UTs. Under Section 16 of the MSMED Act, 2006, delayed payment to supplier units by their buyers, attracts compound interest with monthly rests at three times of the bank rate notified by the Reserve Bank.2. As provided under Section 18(1) of Chapter V of the MSMED Act, 2006, any party to a dispute in connection with the Delayed Payments to MSEs, may make reference to the MSEFC of the State concerned where the supplier is located. All the states/UTs have constituted MSEFCs for speedy disposal of cases referred to them. The Act mandates the MSEFC to decide every reference made to it within 90 days from the date of making such reference. The Ministry of MSME has been regularly taking up the matter of delays in disposing-off the cases referred to MSEFC beyond the prescribed time period with the State Governments/UTs.3. In furtherance of the objectives of MSMED Act, 2006, the Ministry of MSME has launched a portal (MSME SAMADHAAN) (http://samadhaan.msme.gov.in) on the 30th October 2017 which gives information about individual CPSEs/Central Ministries, State Govt, etc. regarding the payment pending with them in respect of the MSEs. The Central Ministries/State Govt. has been provided with user-ID and password to login and monitor the delayed payment cases in respect of organizations under their jurisdiction. The portal also empowers the MSEs to file their delayed payments related to complaints online. After 15 days of filing the case online, the case is automatically registered by the MSEFC concerned. The online filing of cases has been applauded by all MSEs and MSME Association. It is observed that there are instances of payment by buyers from MSEs subsequent to the filing of cases online. Ministry of MSME is making all efforts to make the portal successful and suggestions received from MSEFCs of the States to improve the portal are taken care of.Data of Applications filed by Micro and Small Units (MSEs) at MSME SamadhaanCases filed in MSE Facilitation Council (MSEFC)MSME FORM 1 - A new initiative by Government to help SMEsOn 1st May 2019, the Ministry of Corporate Affairs ("MCA") released e-form MSME 1 ("MSME 1"), requiring all companies obtaining supplies of goods/ services from micro and small enterprises ("Enterprises") and whose respective payments to such Enterprises exceed forty-five days from the date of acceptance or the date of deemed acceptance of such goods/ services to file MSME 1, by 30th May 2019.The release of e-form MSME 1 by the MCA was a result of MCA's earlier order -Specified Companies (Furnishing of information about the payment to micro and small enterprise suppliers) Order 2019 ("Order ") dated 22nd of January 2019. The Order stated that all Companies who get supplies of goods/services from Enterprises and whose respective payments to such Enterprises exceed forty- five days from the date of acceptance or the date of deemed acceptance of such goods/ services (hereinafter referred to as "Specified Companies"), are required to submit a half yearly return to the MCA stating the amount of payment due and the reasons for the delay. The Order required all Specified Companies to furnish details of all such outstanding dues by filing MSME 1.The term enterprises cover Companies, Partnership Firm, Association of Person, Hindu Undivided Family, Co-Operative Society, Proprietorship Firm, etc.It is to be noted that MSME FORM 1 is not applicable in the case of outstanding sums due to medium enterprises.Procedure for filing Form MSME 1MSME 1 requires Specified Companies to provide details such as the total amount that is outstanding on the date of the MSME 1 being deployed, details about the specified Company (name, address, PAN and CIN), particulars of the supplier of the Enterprise (name, PAN), the date from which the amount is due and reasons for the delay in payment.Subsequent to the notification of the Order, the MCA clarified that the due date for filing MSME 1 for the first time shall be thirty days from the date of the deployment of the MSME 1 on the MCA portal. As mentioned, MSME 1 has been released on the MCA portal as on 1st May 2019.Following the first filing of MSME 1, every specified Company is required to file Form MSME 1 on the MCA portal twice a year on or before the prescribed "due-date" which is as under:For the period April - September: 31st October;For the period October - March: 30th April.PenaltyNon-compliance will lead to punishment and penalty under the provision of the Companies Act. As per Penalty Provision of Section 405 (4) of the Companies Act, 2013, failure to comply with the Order, shall attract a fine which is extendable to twenty-five thousand Rupees. Further, any officer in default of the specified Company shall be punishable with imprisonment which can extend to a period of six months or fine which can extend to three lakhs Rupees, but not less than twenty-five thousand Rupees or both.Challenges by ProfessionalsThe Company Secretary of the Company needs to determine whether their suppliers are registered under the Micro, Small and Medium Enterprises Development Act, 2006, which is a great task though. If they have been, and if payments to them are due for more than forty-five days from the date of acceptance of the goods or services, the Enterprise would be compulsorily required to file Form MSME 1. Also, if they are not registered under the MSME Act, suggestions may be given to register as soon as possible to take benefits and protection from the Government. Also, professionals need to take care that every supplier to be paid within the time limit given so that Company does not have to pay penalty/interest for defaulting the Act.Recent updates: MSME sector to contribute 50% to GDP from the current 29%Aiming to provide an impetus to economic activity in the country as well as to revive the rural economy, Union minister Nitin Gadkari said the government will strengthen the micro, small and medium (MSME) industry sector which will not only create five crore jobs but also take the MSME sector contribution in GDP to 50 percent from current level of around 29 percent."Prime Minister Narendra Modi has set a target of India becoming a $5-trillion economy and my ministry will also work on creating five crores more jobs in the next five years to achieve this objective," Union Minister for Road, Transport and Highways and MSME, Mr. Nitin Gadkari said. He advocated the deployment of board gauge metro as an affordable, efficient, and time-saving option for inter-city travel which will reduce stress on large cities like Delhi, Mumbai, and Bangalore.The government asked banks not to declare any stressed loan account of MSMEs as NPA till March 2020 and work on recasting their debt.At a press conference after meeting PSU bank heads, Finance Minister Ms. Nirmala Sitharaman said, there already exists a circular from the Reserve Bank that provides for stressed loan accounts of MSMEs not being declared non-performing assets (NPAs).Conclusions & SuggestionsThe main purpose of data collection was to study how the entrepreneurs managed the micro, small and medium enterprises. Hurdles like financial constrain and issues relating to power, raw material procurement should be more effectively dealt by the government. Overall globalized business environment of India has been favorable for the growth of micro and small scale industries. The nub of the data is that the MSMEs have played role in employment generation in India.Simple and clear policies and acts are made by the Government so that these enterprises can understand them and utilize as well as implement them in their business for compliance and security benefits. There are many Government schemes but it was observed that most of these enterprises are not aware and do not understand how they can benefit from them.It is very important to empower the MSME sector to utilize the limited resources (human & economic) they have in an optimum manner. The MSMEs need to be educated and informed of the latest developments taking place globally and helped to acquire skills necessary to keep pace with the global developments. MSMEs are now exposed to greater opportunities than ever for expansion and diversification across the sectors. Indian market is growing rapidly and Indian entrepreneurs are making remarkable progress in various Industries like Manufacturing, Precision Engineering Design, Food Processing, Pharmaceutical, Textile & Garments, Retail, IT and ITES, Agro, and Service sector.To counter the challenges faced by the MSME sector and grab the opportunities in the market, the Government has developed key strategies to promote and support the MSME sector. The Government encourages MSMEs to adopt innovative ideas and concepts for the promotion of their business. We, the professionals need to help Government in the economic restructuring and development of India by making them aware of MSMEs benefits and opportunities they can have.If you liked the post, please follow this space and kindly, click on below sponsored advertisement flashed by Quora below or after this post. Just clicking on the advertisement is sufficient and you can return to the post. This will help increase the popularity of this page and also earn revenue. Thanks a lot.Link for page - CAs- Finance/Accounts/Tax

There may not be much questions on the subject especially on mathematics, chemistry or physics.There may be questions on the following subjects:CommerceEconomicsHistoryComputer scienceIt has to be noted that the interview is conducted by only retired bank executives and the following will be their main focus when it comes to questions:BankingEconomicsCapital marketCurrent affairsRecent budgetPersonalities who are in the news recentlyRecent happenings in the field of banking, politics and money mattersPlease read the following for better guidance:Tips for Interview for recruitment as Probationary Officers in banksInstructions to candidatesThe purpose of the interview:The purpose of any interview is to select one suitable individual for the concerned post. The person to be interviewed may be having higher qualifications; however, he may not be having the requisite potentials or caliber in handling the job offered namely; better communication ability, leadership quality, emotional strength and efficient interpersonal relationship. Banking demands people who are willing to work hard by mingling with customers freely and friendly apart from maintaining a cordial; social and friendly relationship with the colleagues and superiors.Phases of the interview:The interview is conducted in four phases namely;·the first phase during the course of which questions are asked about the individual and his specialization in any area;·the second phase wherein questions are asked about the bank for which the interview is conducted;·the third phase wherein questions are asked about general banking, economy, finance and latest developments and·the fourth phase is the final round for the interview.The interview committee:The interview committee consists of three to five imminent personalities who are well versed in banking matters and normally the services of executives or retired executives of various commercial banks are utilized for the purpose of conducting the interview. The following system is adopted by the committee members during the course of interview process:·While one member poses questions to the candidate, the remaining members observe the body language of the individual as to how he reacts to the questions and especially in respect of difficult questions;·They also review as to how the candidate comes forward in presenting his answers in a crisp manner thereby providing the relevant points expected by the committee members at the shortest possible time.·Basing upon the answering ability, communication ability, level of confidence, willingness to accept challenges etc., the committee members select the individuals by awarding better gradation.·When the candidate is found to be inattentive on account of low level of self confidence or some other factors, the committee members pose provoking questions so that the candidate is emotionally provoked and aroused to come forward with appropriate answers.The interview process:The interview process consists of the following stages:·Attendance marking by the candidate at the reception committee and filling up the relevant format thereby furnishing his details;·Verification of the certificates namely; qualification certificates, experience certificates, certificates relating to extracurricular activities etc., by the reception committee/team members;·Candidate waiting at the reception hall for his turn;·Once called, candidate entering into the interview room duly seeking permission of the team members;·Candidate thanking the interview members for permitting him/her inside the cabin;·Candidate sitting on the seat once offered by one/more members in the interview committee;·Candidate thanking the person who had offered the seat;·Candidate shaking his hands with the members, if offered;·Candidate eagerly awaiting for the questions from the members;·Candidate mentally preparing himself to attend the interview with full concentration maintaining regular eye contact with the committee members;·Candidate answering the questions posed by the members enthusiastically, till the entire process is treated as completed;·Candidate collecting all certificates and documents once the interview is treated as completed;·Candidate thanking the committee members and·Candidate politely raising from the chair, walking towards the entrance, opening the cabin door and gently closing the door behind him;·Candidate meeting other candidates awaiting at the reception hall cheerfully.Dress code:·Dress code is most important aspect and a person is judged by the dress he wears. Dress makes half man.·For men: Please wear a neat full length trouser and one full length shirt – preferably white or light shaded; Usage of “T” shirts greatly dampens the image of the candidate and the purpose of using any ‘T” shirt is to have better comfort during the course of walking, relaxing, jogging, running, partying and relaxing. As such “T” shirts are not considered to be a fit wear during professional meetings including interviews. Do not wear highly dark colored and checked dresses. The candidate has to wear a good quality shoes neatly polished. If possible he can wear a “tie” and this is purely optional and certain organizations pay more attention to the personality of an individual which gets improved by way of better dressing.·For girls: Under any circumstances girls should not wear provoking dresses namely; “T” shirts, jeans pants, trousers, half gowns and shirts with messages and blouses with low cuts. A neat chudithar is considered to be the best option and wearing of sarees improves the image of the individual.A.Questions during the first phase:·Initially the candidates are invited to tell about their personal life and interests, their family members, their ambitions, their qualifications, their achievements in studies, sports, music and any other extracurricular activities;·The second question is about the place to which the candidate belongs. In case the candidate belongs to Chennai, he will be asked to tell about Chennai and the importance of the place. Necessarily the candidate should have a thorough knowledge about the place from which he is hailing;·The interviewers will pose “ice breaking questions” in order to shift the focus of the candidate. This is for the purpose of finding out the reaction of the candidate during such “focus change”. (Banks demand people who are able to face any challenges);·During the first two to three minutes, more than 80 percent of the questions will be on the personal details and basic information about the candidate. It has to be remembered that – “The first impression is the best impression” and accordingly the candidate has to behave politely, calmly, courageously and confidently.Sample questions during the first phase:·01. My dear friend, now tell us about yourself: The candidate has to inform in a crisp manner about himself, his family, his qualifications, achievements if any etc. Unnecessary details should be avoided altogether and the candidates at no cost should provide information to the committee members with an intention to derive sympathy from the committee members. Such an attitude will prompt the members either to reject or award poor marks.·02. I see – you are from Chennai – please tell me about Chennai: Since the candidate belongs to Chennai, he is invited to tell about Chennai and he should have pre-hand information about Chennai and should come forward to tell about important places in Chennai namely; Marina beach, High Court, Kabaleeswarar Temple, Metro train facilities, Santhome church, International airport, Asia’s biggest bus station at Koyembedu and many more.·03. I find that you had studied in Presidency college. What was the reason for your preference of this college?. How was your life in the college? The candidate has to tell about the college; the achievements of the college in academic scenario as well as in sports and in other areas;·04. I find that you had studied “EEE” - why you had chosen the course? The candidate has to tell about the purpose and the potential available for the students who had opted to pursue EEE course.·05. You are in Chennai for a long period. What is your opinion about Chennai?·06. You are having “EEE” in engineering and why you are willing to get employed in banks? (Your reply should be – In fact by working in a bank, I can develop my relationship with public in a better manner; improve my knowledge and provide better service to as many people as possible since the banks are purely service oriented organisations. I find that I can have more career prospects in future by getting employed in the banks)·07. What are your strengths and weaknesses? – Your answer should be: I am always willing to work hard under all circumstances and since I have a good communication ability, I hope that I can surely develop friendship with my colleagues, clients and others in a fast manner so that I can contribute better to the society.·08. You are a highly qualified person having one MBA degree apart from a degree in Engineering. What is the guarantee that you will be in the bank without shifting your attention to some other employment potential after some time?: Your reply should not be: On account of unemployment problem, I am joining the bank; Your reply should be – even though I have better qualifications, I wish to work in the banking industry because I can have better opportunities to serve for the welfare of the society by working in the bank than any other organisations.Responsibilities of the candidates appearing for the interview:The candidate should do a home work and he should always depend upon his positive straits namely; his strength, achievements and abilities and necessarily he should believe in himself that he can accept and do the job in a better manner and he should altogether avoid any negative reply or angry reply under any circumstances; even when provoked or tempted by the interview board members and the candidate should remain calm and wear a broad smile during the entire interview process.A smile has the power to keep the individual in better spirits at all times.The following question may provoke the candidate –·Dear friend, considering your personality, I find that you look like a film actor. How do you feel yourself ?(You had not at all expected this question and you are tempted to provide an apt reply to them: Your reply should be– In fact I am fond of wearing a neat dress and I take care of my health by doing physical exercises regularly apart from eating moderate food and getting into the bed at the appropriate time. I always believe in the following proverb – “Health is wealth”. An individual may not be in a position to discharge his duties properly without adequate health. The habit of eating quality food, regular exercise and better dressing are the factors which are responsible for my personality.B.Second phase of the interview process:During this phase, questions will be asked about the bank for which the candidate is appearing for the interview and the following are some sample questions in case the candidate is appearing for a post in Punjab National Bank:·Do you know – where is the head office of Punjab National Bank?·Who is the present chairman of the bank?·How many branches are there in Punjab National Bank as on date?·Can you tell me about the total business of the bank?·Can you tell me about some deposit schemes available in the bank?·What do you know about the logo of Punjab National Bank?·What is the punchline of Punjab National Bank?·What is the position of Punjab National Bank among the commercial banks in the country as on date?(It is the responsibility of the candidate to collect the necessary information about the bank for which he is appearing for the interview by visiting the website of the bank and referring other material sources in order to get the required information about the bank namely; the headquarters, number of branches, total business, profit position, important schemes, tie up with another banks, achievements of the bank, if any; the present position and ranking of the bank in terms of business, profitability, non performing assets, productivity of the employee etc., In case the candidate is appearing for a group of banks, he should have information in general about all the banks in the group)C.Third phase of the interview:During this phase, questions will be asked on general banking practices as mentioned below:The following are the questions regarding the banks in general:·Have you visited any bank branch? What was your experience?·What is the business of any bank?·What are the essential/primary functions of any bank?·What are the secondary functions of any bank?·Who can open a savings bank account?·What do you know by KYC guidelines?·Why banks insist customers in adhering to KYC guidelines?·What is the difference between Current deposit account and Savings deposit account?·What do you mean by CASA account?·Who normally opens a current account?·What do you know by a fixed deposit account?·Can a company open a savings account?·Can the director of a company open a savings account?·Who is the controlling authority for the banks in India?·What is a foreign bank?·What is meant by a public sector bank?·Which is the largest private sector bank in the country?·Which is the largest bank in the country?·You are working as an officer in savings department. The customer complains about the irritating behavior of the clerk who is working under your supervision. What will you do in this situation?·Your manager delegates some work and you are failing in doing the work within the allotted time and your manager is not happy with your performance. How will you convince your manager?·Today there is some news about annual credit policy. What do you know by that?·What do you know by reverse repo rate?·What is called as inflation?·What is rupee convertibility?·What do you know by gross domestic product?·What do you know by ASBA?·What do you know by Sensex?·What do you know by a convertible debenture?·What is an initial public offer?·What do you know by facebook – whether it is good or bad for any individual and what is your opinion?·What are the advantages and disadvantages of Whatsapp?·What is your opinion about currency demonetization and how far the process helps in improving the economy of the country?(The above questions are illustrative and not exhaustive and the candidate should know fairly well about many banking as well as general aspects)D.The fourth phase of the interview:Like the initial phase or first phase, this fourth phase is also important wherein tricky questions will be asked as mentioned below:·You are hailing from Coimbatore. In case you are posted to Chennai whether you will be willing to work at Chennai?. (Your answer: If I am posted at Coimbatore, I shall try my level best to bring more business to the bank since I know the place and people well and I can take care of family members who are dependent on me. Even otherwise, I shall discharge my duties to the best when I am posted at Chennai)·Suddenly on account of computer crash, you have to sit late – whether you will be willing to sit late and finish the job or leave early without informing your superiors? (Definitely I will never mind in sitting late and I shall always cooperate with my superiors in finishing the day to day functions of the branch. I am one among the team members and I have the responsibility to cooperate with other members during critical situations)·What information are you willing to tell about yourself? (If I am selected, I shall work hard and I shall discharge my duties to the entire satisfaction of my superiors. I shall always do the best from my side for the growth of my organization.)Selected Interview QuestiomsCandidate: 00101.Why you are willing to join in a bank?I am willing to join in a bank since I hope that I may be having more opportunities to serve the public. Banks have better career opportunities by means of periodical promotions to higher cadre.02.What do you mean by appraisal of gold loans?Gold loans are granted against the security of gold jewellery namely gold chains, necklaces etc., The jewellery apart from gold contains certain amount of copper and stones. Appraiser is a person well versed in the art of appraising the jewellery and on appraisal of the jewellery, he will be finding out the approximate gold content so that the bank may be able to provide loans against the gold content.03.What are the different kinds of term deposits available in a commercial bank?The different kinds of term deposits available in a commercial bank are – fixed deposit, recurring deposit and reinvestment deposit. In the case of fixed deposit, a fixed amount is accepted for a definite period and interest is paid on quarterly basis. In the case of reinvestment deposit which is similar to fixed deposit, interest is paid on maturity since interest is reinvested. In the case of recurring deposit, monthly instalments are accepted for a fixed period.04.What is the minimum period for which a fixed deposit is accepted and the maximum period for which a fixed deposit is accepted?The minimum period for which fixed deposit is accepted is seven days and the maximum period is ten years.05.Whether a fixed deposit can be accepted for a period more than ten years?In the case of deposits in the names of minors on account of settlement of claims, the deposit can be for more than ten years06.What do you mean by FERA?FERA means foreign exchange regulations act and it came into effect from the year 1973. An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act ( FERA) of 1973, it is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.07.What do you mean by ECS?ECS means electronic clearing service and the customer can authorize on periodical basis to make payment of certain utility bills like electricity charges, water charges etc., by debiting his account till such time he submits a revocation letter. Similarly, he can authorize corporate to credit the dividends on shares and interest on debentures as and when due to the credit of his account with the bank.08.What is the minimum amount that can be sent through RTGS?The minimum amount that can be sent through RTGS is Rupees two lakhs and there is no maximum limit09.What is the maximum amount that can be remitted through NEFT?There is no or maximum limit for remittances sent through NEFT10.What is the maximum amount that can be sent abroad by any resident individual?Under liberalized remittance scheme, all resident individuals including minors are allowed to freely remit an amount upto US dollars 250000 (or its equivalent freely convertible foreign currency) per financial year11..What is the name of apex bank which is responsible for the development of agriculture in the country?NABARD is the apex bank which is responsible for the development of agriculture in the country.12.What are the different kinds of schemes available in our country aiming towards poverty alleviation?National old age pension scheme; Jawahar Gramin Samruddi Yojana; National Family Benefit scheme; Mahatma Gandhi National Rural Employment Guarantee Scheme; National Maternal Benefit Schemel Annapurna etc.,13.What do you mean by crossing of any cheque?Writing of two parallel transverse lines drawn on the face of the cheque on top left hand corner with or without any words between the lines is known as crossing and it is for the purpose of making payment of the cheque through an account in the name of the payee or holder.14.What are the different kinds of crossing?Two parallel transverse lines drawn on the face of the cheque on top left hand corner of the cheque with any words or without any words is known as general crossing and the the payment can be made to the account of the payee or holder with any bank. In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.15.What do you mean by CASA?CASA means current and savings and this is applicable to computerized branches linked under core banking solution16.Whose signature is available in Rs. 100/- currency note?The signature of RBI governor is available in Rs. 100 currency note17.What do you know by dividend?Dividend is the return available in the form of money for the investments made by the shareholders in the equity shares and preference shares of any company.18.Bank holidays are declared according to which act?Holidays for banks are declared according to Negotiable Instruments act 1881 by the respective state governments in their states. However, all Sundays, all second and fourth Saturdays have been declared as holidays apart from the holidays permitted for religious and national ceremonies.19.Banks are functioning according to which act?Commercial banks in the country are functioning according to Banking Regulation act 1949 and to some extent as per Reserve Bank of India act 193420.RBI is functioning in the country as per which act?Reserve Bank of India is functioning according to Reserve Bank of India act 1934.Candidate: 00201.What do you mean by a guarantee?Guarantee is an undertaking executed by one person called as guarantor in favour of another person called as beneficiary expressing his intention to make payment in the event of failure of the principal debtor on payment of a debt or failure to perform any contract within the stipulated time or according to the terms of the contract.02.What are the different types of guarantees?The different types of guarantees are financial guarantee, performance guarantee and deferred payment guarantee03.What do you mean by letter of credit?Letter of credit is an undertaking executed by one banker on behalf of its customer to honour bills and documents drawn by another person as per the terms and conditions as mentioned in the letter of credit04.What do you know by packing credit advance?It is the preshipment advance granted by one bank to the exporter for the purpose of procuring raw materials; payment of various duties like customs duty, excise duty; packing charges; shipment charges etc.,05.What do you mean by special crossing?In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.06.What do you know by IFSC code ?IFSC means Indian Financial System Code and this is one alphanumeric code consisting of eleven digits of which the four alphabetic digits represent the name of the bank mentioned in abridged form and the next zero is known as control number and the last six numeric digits represent the branch code of the bank.07.Which is called as mother of deposits?Savings deposit is known as mother of deposits. Normally the first time customers will be advised to open savings deposits with the bank branch before availing any other facility with the bank08.Who is a called as natural guardian?Bother mother and father are known as natural guardian for the purpose of opening accounts in the name of minors represented by the guardian.09.Whether grandfathers and grandmothers can be natural guardians?Grand fathers, grandmothers grand grandfathers or grand grandmothers cannot represent as natural guardians on be behalf of the minors10.Which type of credit facility is available to a farmer for raising crops?For raising crops, the farmers are provided with crop loans, Kisan Credit Cards etc.,11.What do you mean by NULM?National Urban Livelihoods Mission (NULM) was launched by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), Government of India in 24th September, 2013 by replacing the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY).The NULM will focus on organizing urban poor in their strong grassroots level institutions, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment venture by ensuring easy access to credit. The Mission is aimed at providing shelter equipped with essential services to the urban homeless in a phased manner. In addition, the Mission would also address livelihood concerns of the urban street vendors12.What do you mean by Gram Sadak Yojana?The Pradhan Mantri Gram Sadak Yojana called as PMGSY was launched by the Government of India for the purpose of providing connectivity to unconnected habitations as part of a poverty reduction strategy. Government of India is endeavouring to set high and uniform technical and management standards and facilitating policy development and planning at state level in order to ensure sustainable management of the rural roads network.13.What are the salient features of MGNREGA?MGNREGA is known as Mahatma Gandhi National Rural Employment Guarantee act and according to this employment is guaranteed at least one person per household in rural areas. It aims at enhancing the livelihood security of people living in rural areas by guaranteeing hundred days of wage employment during each financial year to a rural household whose adult members volunteers to undertake unskilled manual work14.Which authority is supervising the functions of insurance companies?IRDA – Insurance Regulatory and Development Authority is the authority responsible for supervising the functions of insurance companies in our country15.What is meant by IPO?IPO means initial public offer and this is the first time public offer of equity shares, preference shares or debentures to the public for subscription16.What is meant by ASBA?ASBA means applications supported by blocked amount. Nowadays investors are permitted to remit the amount through ASBA demand drafts drawn in ASBA accounts for the purpose of subscribing shares or debentures through initial public offer and further public offer. When the demand draft is issued, instead of debiting the amount in the account, the amount is blocked till such time the shares or debentures are allotted. On allotment, the entire amount is debited; in the case of partial allotment, the amount is debited equivalent to the value of allotment and in the case of non allotment, the entire amount is allowed for further use. For the intervening period, the depositor earns interest as applicable to the category of deposits.17.What is meant by Performance guarantee issued by any commercial bank?In the case of contracts in favour of governments, the contractors are in a position to provide a bank guarantee by a reputed commercial bank, thereby undertaking to guarantee the government department to compensate the loss on account of failure of performance of the contract by the contractor within the due date or failure to perform the contract as per the terms and conditions of the contract. This is known as performance guarantee.18.What do you mean by packing credit facility issued by any commercial bank?Packing guarantee is known as preshipment advance provided by the commercial bank to the exporter for the purpose of procuring raw materials, packing materials or making payment towards customers duty, excise duty, transportation charges etc.,19.What do you mean by notice money?Notice money is money borrowed for a period of two days and more and upto fourteen days in the call money market.20.Treasury bills are issued by which authority and what are the different kinds of treasury bills available in the country?Treasury bills are issued by central government and state governments for the purpose of mobilizing funds from the public and others towards meeting the cost of various projects. There are three kinds of treasury bills as at present namely – 91 days, 182 days and 364 days. 91 days treasury bills are issued each Friday and the notified amount is Rupees one hundred crores. 182 day treasury bills are issued during alternative Wednesdays which is non reporting week and the notified amount is Rupees 100 crores and 364 days treasury bills are issued on alterntive Wednesdays which is a reporting week and the notified amount is Rupees 500 crores.Candidate: 00301.What do you know by PIN number?PIN number is four digit number expressed in numerical characters. PIN number is used for the transactions done using debit cards and credit cards through automated teller machines and point of sale terminals.02.What do you know by PAN number?PAN number is known as permanent account number. This is used for the purpose of remittance of income tax with income tax department. Tax payers should get one PAN number by sending an application along with relevant documents and by payment of specified sum of money to Income tax department or their agencies. It is ten digit number consisting and alphapetical and numerical characters.03.What are the functions of DICGC?DICGC means Deposit Insurance and Credit Guarantee Corporation and this corporation provides deposit insurance upto an amount of Rupees one lakh per depositor per bank in the event of insolvency of the bank and it also provides small loans guarantee upto certain limits04.What is the role played by ECGC?ECGC provides guarantee support to the exporters of the country in the form of several export guarantees05.Mention the Regional Rural Banks which are functioning in Tamilnadu?The Regional rural banks which are functioning in Tamilnadu are Pandiyan Grama Bank and Pallavan Gramin Bank. Pandiyan Grama Bank has been sponsored by Indian Overseas Bank and pallavan Gramin Bank has been sponsored by Indian bank.06.What do you mean by Mergers and what are the different kinds of mergers?When two independent units merge together to form a single unit, it is known as merger. The mergers can be vertical merger, horizontal merger, reverse merger, consolidation, amalgamation etc.,07.What do you mean by horizontal merger and reverse merger?When the business functions of two units are identical in nature and when the merger takes place between those units, it is known as horizontal merger. New Bank of India merged with Punjab National Bank and both are banking organizations. Industrial Credit and Investment Corporation of India Limited was instrumental in establishing ICICI bank as per LPG norms and subsequently Industrial Credit and Investment Corporation Limited merged with ICICI Bank and when a parent unit gets merged with an ancillary unit, it is known as reverse merger.08.Which are the top two private sector banks in our country?The top private sector banks in our country are HDFC bank limited and ICICI bank limited09.Whether housing loan is a priority sector advance and if so, upto what amount?Housing loans granted are treated as priority sector advances subject to certain conditions. Loans to individuals up to Rupees 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rupees 20 lakh in other centres for purchase/construction of a dwelling unit per family, are eligible to be considered as priority sector provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rupees 35 lakh and Rupees 25 lakh, respectively. Housing loans to banks’ own employees are not eligible for classification under priority sector.10.Whether educational loan is a priority sector advance?Loans to individuals for educational purposes including vocational courses upto Rupees 10 lakh irrespective of the sanctioned amount are eligible for classification under priority sector.11.What do you mean by micro, small and medium enterprises?The classification is based on original investment in plant and machinery: For micro enterprises, upto Rs. 25 lakhs for manufacturing units and Rupees 10 lakhs for service units; For small enterprises, for manufacturing units above Rupees 25 lakhs and upto Rs. 5 crores and for service units above Rupees 10 lakhs and upto Rupees 2 crores; For medium enterprises, for manufacturing units above Rupees 5 crores and upto 10 crores and for service units above Rupees 2 crores and upto Rupees five crores12.What do you mean by KYC and name any two important documents which are obtained as per KYC?KYC means know your customer guidelines and these guidelines were prescribed by RBI for new customers who are willing to open accounts with commercial banks and according to KYC, any new customer who is willing to open accounts with commercial banks should submit the photocopy of anyone of the following namely; driving licence, voter id card, AADHAARA card, passport as address proof and photocopy of anyone of the following namely; driving licence, voter id card, AADHAAR card, passport, pancard as identity proof. KYC is antimony laundering device.13.What is the present repo rate and reverse repo rate?The present repo rate is 6.25% and reverse repo rate is 5.75%14.In the case of MICR code, the middle three digits represent what?MICR code consists of nine numerical digits and the middle three numerical digits represent bank name15.PAN number consists of how many alpha characters?PAN number consists of ten digits. The first three alpha characters are random alphapetical characters between AAA to ZZZ; next one alpha character represents the category of the cardholder; the next one alpha character represents the first character of the name of the cardholder; the next four numerical digits are auto generated sequential numbers and the last one single alpha character is a check digit.16.What do you know by biometric automated teller machines?In the case of automated teller machines, the four digit numerical PIN number is used for performing transactions using debit card and credit card. In the case of biometric automated teller machines, instead of PIN numbers, anyone of the following body parts is used – left hand thumb impression; eye retina and voice recognition. In India, the left hand thumb impression is the accepted mode and these kinds of automated teller machines are known as green label automated teller machines.17.What is the criteria by which a bank is considered as largest bank?For the purpose of ranking, a bank is considered to be largest or smallest taking into consideration the business position of the bank; namely – the total deposits and total advances as at the end of March each year.18.What do you mean by commercial paper?Commercial papers are issued by well rated organizations for mobilizing funds from the public and other corporate. They are issued at a discount and they are freely negotiable by endorsement and delivery. The minimum maturity period is seven days and the corporate should have earned credit rating equivalent to P2 issued by CRISIL19.What do you mean by FCNR?FCNR means foreign currency non resident accounts. Non resident Indians and Persons of Indian origin are eligible to invest in this deposit. It is a term deposit accepted in the currencies – US dollar, Sterling Pound, Euro, Japanese Yen, Canadian dollar and Australian dollar. The minimum period of deposit is one year and the maximum period is five years and the deposit is held in foreign currencies and the interest earned is free from income tax.20.What do you mean by Escheat?He is a person who dies without leaving any legal heirs and in this case, his estate will revert to the state government.Candidate: 00401.What do you mean by money laundering?Using the banking channel for the purpose of bringing illegal money is known as money laundering.02.What do you mean by subprime lending?Mass lending by commercial banks to the borrowers without ascertaining the credit worthiness of the borrowers03.What is meant by LPG and who is responsible for introduction of LPG strategy in our country?LPG means liberalization, privatization and globalization and this was coined by Dr. Manmohan Singh, the then finance minister of our country. The salient highlights of the Liberalisation, Privatisation and Globalisation Policy in India are: Foreign Technology Agreements; Foreign Investment; MRTP Act, 1969 (Amended); Industrial Licensing; Deregulation Beginning of privatization; Opportunities for overseas trade; Steps to regulate inflation; Tax reforms; Abolition of License -Permit Raj04.What do you mean by PURA?PURA means providing urban amenities in rural areas. This concept was coined by Dr. A.P.J. Abdul Kalam, the then president of India.05.What do you know by current ratio?It is one equation between current assets and current liabilities. This ratio provides the liquidity position of the organization. When the ratio is more than one it is known as positive current ratio and the unit is having sufficient working capital and when it is less than one, the unit is found to have more current liabilities than current assets and the liquidity position is found to be very weak.06.What do you know about negotiable instruments act?In India, the negotiable instruments act was passed during 1881 which came into force with effect from March 01, 1882. Negotiable instruments means and include promissory note, bills of exchange and cheque payable to order or bearer. Promissory note, bill of exchange, cheque and demand draft are negotiable instruments.07.What do you know by MICR?MICR means magnetic ink character recognition. MICR code is available in MICR bank at the bottom of the cheque or demand draft. It consists of nine numerical digits of which the first three digits represent the centre/city; the middle three digits represent the bank and the last three digits represent the branch of the bank.08.When it comes to rural lending, which are all considered to be priority sector advances?When it comes to rural lending, the loans granted to the following are considered to be priority sector advances – Loans granted to all agriculture related activities; self help group; Differential rate of interest; Loans to SC/ST beneficiaries; Loans provided to doctors for setting up clinics in rural areas; Loans to dealers in fertilizers and pesticides; loans to dealers of springler irrigation and drip irrigation equipments etc.,09.Who is called as an authorized dealer?Authorised dealer is at present known as authorized person. Authorised person is an individual or organization permitted to deal in foreign exchange business in the country.10.What do you know by financial inclusion?Financial inclusion means the following: Providing formal banking services to poor people in urban and rural areas; Promoting the habit of money savings, insurance, pension-investment among poor people; Helping the people in getting loans at reasonable rates from commercial banks so that they do not become victims to local moneylenders11.What are the important initiatives taken through financial inclusion in the country?The following are the important initiatives taken through financial inclusion in our country: Lead banking scheme; No frill accounts; Basic savings bank deposit accounts; JANDHAN accounts; business correspondent and business facilitator facilities; Swabhiman campaign;12.What do you mean by MCLR?MCLR replaces the base rate system. RBI introduced the system with effect from 01.04.2016 in order to determine the base rate by commercial to improve the efficiency of monetary policy transmission. All rupee loans sanctioned and credit limits renewed with effect from 01.04.2016 to be priced with reference to MCLR and it will be an internal benchmark for the banks. It consists of marginal cost of funds, negative carry on account of CRR, operating costs and tenor premium. The marginal cost of funds consists of two components namely; marginal cost of borrowings and return on networth13.What are the major money market instruments?Certificate of deposits; Commercial paper; Inter Bank participation certificates; iner bank term money; Treasury bills; Bills rediscounting and call/notice money14.What are the differences between NEFT and RTGS?Both are two categories of online remittance facilities through CBS enabled branches of commercial banks. The minimum balance that can be sent through RTGS is Rupees two lakhs whereas in the case of NEFT, there is no such limit. The beneficiary gets his funds at real time and it means instantaneously without any loss of time. In the case of the beneficiary gets his funds in between batches15.Who is deciding the rate of interest for savings deposit accounts?Rate of interest for savings deposits is decided by respective commercial banks only and RBI has permitted full freedom in this connection.16.Who cannot open savings deposit accounts?Proprietorship concerns, partnership firms, limited liability partnership firms, private limited companies and public limited companies are not permitted to open savings accounts17.What is meant by memorandum of association?Memorandum of association is the parent document for any company whether it is a private limited company or private limited company. It contains the details of formation of the company, policies, objectives, registered office and more.18.What is known as power of attorney?Power of attorney is an authorization given by one person called as principal in favour of another person called as an agent authorizing the agent to perform certain activities on behalf of the principal and it can be specific power of attorney or particular power of attorney.19.In which currencies FCNR accounts can be opened in our country?FCNR account can be opened in the following currencies namely; US dollars, Sterling Pounds; Euro; Japanese Yen; Australian dollars and Canadian dollars.20.What are the differences between NRE and FCNR?NRE and FCNR accounts are opened by non resident Indians and Persons of Indian Origin in India. NRE accounts are to be opened in rupees whereas FCNR is opened in foreign currencies. NRE accounts can be opened in the form of savings account, current account, reinvestment deposit and fixed deposit whereas, FCNR account is permitted to be opened as fixed deposit or reinvestment deposit. NRE term deposits can be opened for a minimum period of seven days and maximum period of ten years. FCNR accounts can be opened for a minimum period of one year and maximum period of five years.Candidate: 00501.What do you mean by masala bonds?Masala bonds are the bonds issued for rupee denominated borrowings by Indian companies in overseas markets02.What do you mean by secondary market in our country?Secondary market pertains to capital market and it is also known as stock exchange or old issues market. Shares, debentures and bonds can be bought and sold from the stock exchange through registered brokers.03.What do you mean by fund based limits and non fund based limits?The loans provided to the borrowers in the form of term loans, overdrafts, cash credits and bills discounting limits are known as fund based limits since funds are released to the borrowers. Guarantees and letter of credits are non fund based limits since no funds are provided for the time being since they are contingent liabilities.04.What do you mean by off balance sheet items?Guarantees, letter of credits and bills sent for collection for which proceeds are yet to be realized are known as off balance sheet items05.What do you mean by closed ended scheme?This is one form of mutual fund scheme. Like initial public offer, the scheme is open for a certain period only and after which the public cannot invest their amount in the units under this scheme.06.What do you mean by open ended scheme?This is one mutual fund scheme and the units under scheme can be purchased and sold at any time07.What do you mean by overdraft facility granted by a bank?Overdraft is a facility granted by the banks towards meeting the working capital requirements of a borrower. This is provided by means of credit limit over and above the current account balance and the borrower has to pay the interest as and when due.08.What do you mean by collateral security?Collateral security is an additional security provided by the borrower in addition to the primary security. For example, in the case of vehicle loan, the car purchased out of loan is known as the prime security and the insurance policy obtained by the bank from the borrower for the sanction of this loan is known as collateral security.09.In regard to educating a customer, what are the different kinds of information boards displayed in a bank branch?The following boards are available in the bank branches – Working hours and business hours; Interest rates on various deposits; Interest rates for loans; Service charges; Time norms for various services; Details of schemes available in the branch10.Who is the present RBI Governor?The present governor of RBI is Shri Urjit Patel and he is functioning as the governor of RBI since 04th September, 201611.What do you mean by unclaimed deposits?The deposits which are not in operation for more than ten years are known as unclaimed deposits. For the purpose of this classification, the customer induced transactions are only taken into account.12.How many regional centres are available for RBI in the country?Reserve Bank of India has four regional centres at the following places – Chennai, Kolkatta, New Delhi and Mumbai.13.What do you mean by white label automated teller machines?The automated teller machines which are maintained and managed by non bank entities are known as white label automated teller machines. In our country TATA Indicash and Muthoot finance are having such machines installed at various centres.14.What are the advantages of CTS?CTS means cheque truncation scheme. This is used for clearing purpose. Normally commercial banks used to send the physical cheques through their15.What do you mean by certificate of deposits?Certificate of deposits are issued by scheduled commercial banks (except Regional Rural Banks) and all financial institutions within their umbrella limits. Individuals, corporate, companies, trusts, funds and associations can invest in certificate of deposits and they are issued for a minimum period of seven days and maximum period of twelve months in the case of commercial banks and in the case of financial institutions the minimum period is one year and maximum three years, Minimum amount for investment is Rupees one lakh and in multiples of Rupees one lakh.16.RBI is called by which names – mention four names?RBI is called by the following names – banker to banker; lender of the last resort; custodian of banks; banker to government;17.What do you mean by ways and means advances?Ways and means advances were introduced as per an agreement between Reserve Bank of India and Government and they are temporary overdraft facilities provided by RBI to central government and state governments and the purpose is to bridge the time interval of mismatch the government expenditure and receipts. The duration of the limit is ten days for central government and 14 days for state government departments.18.Who is banking ombudsman and by whom he is appointed?Banking Ombudsman is an arbitrary authority who resolves the complaints received from the customers of commercial banks in regard to bank related issues.19.What do you mean by EEFC account?Exchange Earner’s Foreign Currency account is an account maintained in an account maintained in foreign currency with an authorized dealer ; i/e/ a bank dealing in foreign exchange. Professionals, exporters, trainers etc., who are in receipt of foreign exchange for the services extended by them in foreign countries can invest the amount in EEFC account and the account will be in the form of current account and no interest is paid for the balance held in EEFC account.20.What do you know by NBFC?NBFC means non banking finance companies. It is a company registered under Indian Companies act 1956 and presently 2013 engaged in the business of providing loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire purchase, insurance business, chit fund business etc.,Candidate: 00601.What do you mean by arbitrage?It is the process of purchase of one security from one market and selling the same security for earning a profit at the same time at another market.02.What do you mean by Bonus shares?It is the free allotment of shares in certain proportion to the existing shares held by the shareholders of a company and this is a means of providing reward to the investors for their contribution to the growth of the organization by capital investment03.What do you mean by Bull?It is a term given to a speculator on stock exchange who buys the securities in expectation of a rise in the prices. The market is called as bullish when there is a domination of buyers over the sellers04.What is known as dematerialization?Dematerialisation is the process by which shares in the physical form are cancelled and they are issued in electronic form. The certificates are known as demat shares. This process eliminates the time and manpower involved in transfer and registration of shares from the seller to the buyer05.What do you mean by moorat trading?It is the auspicious trading on a special day, say Diwali during some specified hours.06.What do you mean by rights issue?It is the issue of new shares to the existing shareholders in a fixed ratio to those already held at a price which is generally below the market price of the old shares.07.What do you mean by futures?It is a standard contract issued on an agreement to buy or sell an asset at a certain price at a certain time in future. It is an obligation on the buyer to purchase the underlying instrument and the seller to sell it.08.What do you mean by forward?The forward is a contract that is traded off the stock exchange and it is self regulatory and has certain flexibility unlike future which are traded at stock exchange only and it do not have flexibility of quantity and quality of commodity to be delivered and these are regulated by Securities Exchange Board of India, Reserve Bank of India or other agencies.09.What do you mean by factoring?Factoring is an arrangement in which short term domestic receivables on sale of goods or services are sold to a company called as factor and this scheme came into existence during 1991 based on the report of Kalyanasundaram Committee10.What do you mean by forfeiting?Forfaiting represents the purchase of obligations, which fall due at some future date and arise from the delivery of goods in export transactions, without recourse to the previous holder of the obligations.11.What do you mean by leasing?A lease is a contract where the owner of the assets transfers the right to another person to use the assets against the payment of fixed lease rentals. In the case of one lease contract, there are two parties namely – the lessor or the owner and the lessee or user. The lessor remains owner and the leased property remains with the possession of the lessee.12.What do you mean by debt market?It is a market wherein the debt instruments are issued to the public by any company for investment and such debt instrument bears a fixed interest rate payable half yearly on specific dates and principal amount repayable on particular date on redemption. Debentures are normally secured/charged against the asset of the company in favour of debenture holder. The following are some debt instruments – debenture; bond; zero coupon bond; convertible bond; security receipts etc.,13.What do you mean by greenshoe option?It is an option provided by Securities and Exchange Board of India to a company which is coming out with one initial public offer to the public. By this option, the company can retain certain portion of the applications received through IPO in case of oversubscription.14.What do you mean by equity market?Equity market consists of investment by the public in different kinds of shares issued by the company and by subscribing for the shares, the investors are expressing their willingness to stand as owners of the company. The equity market consists of equity shares, preference shares, rights shares, bonus shares etc.,15.What do you mean by sweat equity?Directors and employees contribute intellectual property rights to the company in the form of providing technical know-how captured by way of research or contributed by way of strategy software developed for the company or adding profit and economic value. To compensate the directors and employees, the concept of sweat equity has come into existence.16.What do you mean by participatory notes?A participatory note is a financial derivative instrument issued against an underlying security and it allows the holder, to get dividend or capital gains earned from the underlying security although some of the holders may not be eligible to trade in stock markets in India.17.What do you mean by book building?Book building is the process to assess the demand for a particular public issue of various prices, based on which the issue is priced and sold to the investors.18.What do you mean by sensex?It is a stock market index provided by Bombay Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for investment or dis-investment to the general public and especially the investors in the stock market. It is based on the market capitalization of top thirty shares earmarked by BSE19.What do you mean by Nifty?It is a stock market index provided by National Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for the investment or dis-investment to the general public and especially the investors who are participating in stock market trading. It is based on the market capitalization of top fifty shares earmarked by NSE20.What do you mean by swap?A swap is a contract that binds two counterparties to exchange the different streams of payments over the specified period at specified rate.

NSEL case or NSEL scam relates to a payment default at the National Spot Exchange that occurred in 2013. The case is under investigation with the spotlight on the involvement of brokers,defaulters, investors and key decision makers. NSEL was promoted by Financial Technologies India Ltd. The payment default took place when the then commodities market regulator, the Forward Markets Commission (FMC) directed NSEL to stop launching any fresh contracts leading to an abrupt closure of the Exchange in July 2013.BackgroundThree spot exchanges NSEL, NSPOT and National APMC were exempted by the government under Section 27 of FCRA to conduct forward trading in one day contracts. This was done to boost volumes so that their economic viability improved. While Financial Technologies (India) promoted NSEL was granted general exemption on June 5, 2007, NSPOT and National APMC received exemptions under the same provisions on July 23, 2008 and August 11, 2010 respectively. On the flawed recommendations of the FMC, the Ministry of Consumer Affairs ordered NSEL to settle all existing contracts and not launch any fresh contracts, which led to the crisis.Investigations led by Enforcement Directorate (ED) & Economic Offences Wing (EOW) revealed the role of brokers & defaulters in the NSEL case.The brokers mis-sold NSEL products to their clients by assuring them fixed returns. The defaulters hypothecated stocks and produced fake warehouse receipts and siphoned the entire default money.Initially, it was projected that there were 13,000 trading clients affected by the NSEL crisis. The genuineness & entitlement of these 13,000 trading clients is questionable as NSEL & other authorities repeatedly asked its members/brokers to furnish the Know Your Customer (KYC) details of all 13,000 trading clients, but it has not been furnished. In fact, they vehemently opposed it. Even the high power committee of Mumbai High Court also suggested that brokers should furnish this data to NSEL in order to protect interest of genuine claimants. Considering this aspect, SFIO which is also investigating the case, has recently asked brokers & trading clients to provide various information in a specific format which also includes KYC related information.Anjani Sinha, the sacked CEO and the MD of the company, owned up the entire responsibility of the crisis in his first affidavit. However, Anjani Sinha after arrest retracted his earlier affidavit. Subsequently, after his release, Sinha admitted to the contents of his first affidavit in his statement to the Enforcement Directorate.HistoryPursuant to the then Prime Minister’s vision to create a single market across the country for both manufactured and agricultural produce, NSEL (National Spot Exchange Limited) was conceptualized in the year 2004. According to the Economic Surveys of the government done in 2003-2006, 3 consecutive years of survey also recommended setting up a national-level, integrated market for agricultural products, as did the planning commission, which was aware of the benefits of the spot markets. This was followed by the Rangarajan Committee, which too sought a national spot market. Following the invitation from Ministry of Consumer Affairs (MCA), the Multi Commodities Exchange Ltd. (MCX) which was earlier a sister company of NSEL, submitted a project report for establishing a nationwide spot market for commodities. NSEL was set up as a company incorporated under the Companies Act, 1956 on 18 May 2005 with its registered office in the State of Maharashtra. NSEL was incorporated by MCX and the nominees of FTIL. Subsequently, in view of the regulatory concerns between regulated commodities exchanges holding equity shareholding in spot exchanges, the shareholding of MCX and nominees were transferred and consolidated later in 2005 with FTIL. On 5 June 2007, NSEL was approved as a Spot Exchange by Department of Consumer Affairs (DCA). National Spot Exchange Limited (NSEL), commenced live trading on October 15, 2008, and was the first commodity spot exchange of the country. Within a few years, as many as six state governments issued licences under the model Agricultural Produce Market Committees (APMC) Act to NSEL, because their own APMCs mostly short-changed the poor farmers. NSEL turned out to be a boon for such farmers because they could now sell their produce at competitive rates and make better profits. NSEL also led to transparent spot price discovery leading to the growth of electronic spot markets. The Exchange was also promoted by National Agricultural Cooperative Marketing Federation of India (NAFED). In August 2011, FMC was appointed as the ‘designated agency’ to fill the regulatory vacuum in the commodities market. A series of bizarre actions by the FMC spooked the market and as a result NSEL had to suspend the trading of all contracts on July 31, 2013.EOW Mumbai police actionThe EOW (Economic Offences Wing) of Mumbai police is presently investigating this crisis and the Mumbai police has conducted various raids. On 9 October 2013, Amit Mukherjee, the Assistant Vice-President (Business Development) of NSEL, was arrested by the EOW of the Mumbai police marking the first arrest in the payment crisis. Subsequently, a day later on 10 October 2013, the EOW of Mumbai Police arrested Jai Bahukhandi, the former Assistant Vice-President of NSEL. Former CEO and MD, Mr. Anjani Sinha, was the third arrest in the case; he was arrested a week later on 17 October 2013. The EOW has since invoked the MPID (Maharashtra Protection of Investors Deposit) Act, under which it can attach properties and assets of the accused, for the interest of the investors. Mr. Nilesh Patel of NK Proteins Ltd., the biggest borrower from the NSEL, was arrested on 22 October 2013 who got out on bail subsequently. Mr. Surinder Gupta of PD Agroprocessors who owns Dunar brand rice has been arrested by EOW on 5 March 2014. Mr. Gupta tried various delaying tactics with EOW, NSEL and investors. The EOW also arrested Rajesh Mehta of Swastik Overseas Ahmedabad who was one of the borrowers on 1 April 2014. On 6 January 2014, the EOW of Mumbai's crime branch submitted its first chargesheet in connection with NSEL payment crisis. The chargesheet mentions the names of the following five accused: Amit Mukherjee (Former VP, Business Development at NSEL) Jay Bahukhandi (former AVP at NSEL) Anjani Sinha (Former Chief Executive of NSEL) Nilesh Patel (MD of NK Proteins) Arunkumar Sharma (Promoter & Director of Lotus Refineries) In October 2013, EOW registered a case under the MPID Act in the NSEL scam. In the process, EOW attached defaulters' properties worth close to Rs. 4,500 crore across the country, and the MPID court initiated procedures to liquidate them so as to recover dues of depositors. The ED has attached properties of defaulters, worth around Rs. 800 crores in NSEL case. The EOW arrested defaulter borrowers Nilesh Patel (NK Proteins), Arun Sharma (Lotus Refineries), Surinder Gupta (PD Agro) and Indrajit Namdhari (Namdhari Foods). On 11 August 2014, the EOW recently arrested the following officials from six defaulting companies on NSEL. Kailash Aggarwal (Ark Imports) Narayanam Nageswara Rao (NCS Sugar) B V H Prasad (Juggernaut Projects) Varun Gupta (Vimladevi Agrotech) Chandra Mohan Singhal (Vimladevi Agrotech) Ghantakameshwar Rao (Spin-cot Textiles) Prashant Boorugu (Metcore Steel & Alloys) Rajvardhan Sinha, ACP, EOW of Mumbai Police said in an interview that the defaulters were not forthcoming with information pertaining to certain money flows, etc. The investigating official felt that custodial interrogation would help in tracing the fund flow. "The maximum money has been invested in immovable properties, some money has been used for payment of previous debt and some has just disappeared in a sense that it has been spent. Rs. 5,600 crore is gone. But most of the amount has been turned into assets," Rajvardhan added.Arrests by EOW MumbaiAllegation on investigative agenciesThe investors of NSEL formed an organization by the name of NIF in the month of August 2013. However investors who were dissatisfied with brokers’ role in NIF formed a pure investors’ organization by the name of NIAG (NSEL Investors Action Group). The NIAG has written multiple letters to Enforcement Directorate and CBI alleging lax and compromised investigation.Suspected foul play in detecting NSEL-FTIL email data/seversThere are serious allegations on Mumbai Police EOW of tampering with NSEL-FTIL email servers. While earlier it was confirmed by Rajvardhan Sinha of Mumbai EOW that the mail server of NSEL/FTIL has crashed and has been sent to Bangalore for investigation. Ketan Shah the man leading NSEL investors' association NIAG has leveled charges on the investigating agencies of misleading the court. The EOW of Mumbai Police has appointed Mahindra Defence Arm as the digital forensic auditor to probe the NSEL crisis.CBI ActionIndia's premier investigation agency The Central Bureau of Investigation raided various NSEL and borrowers' offices as well as the residence of Jignesh Shah and booked an FIR under prevention of corruption act for the funds that MMTC and PEC -two public sector units were made to invest in NSEL. [33] Jignesh Shah and Joseph Massey have also been booked in this FIR.However investors have complained that CBI has taken no action against politicians/bureaucrats involved in this scam. The CBI conducted searches at 15 locations to unravel the conspiracy to get Project & Equipment Corporation (PEC), a PSU, to trade on NSEL. The fraud by a group of people resulted in an alleged loss of Rs. 120.75 crore to PEC, said the CBI in a press release on 13 March 2014. The CBI agency conducted simultaneous searches at 11 locations, including offices of brokers, PEC officials and traders in New Delhi and Karnal. The CBI also registered a case against certain officials of PEC on allegations that the accused were party to a criminal conspiracy to cheat PEC.Role of the Ministry of Consumer Affairs, FMC & the UPA GovernmentIn a show cause notice dated April 27, 2012, the Ministry of Consumer Affairs asked NSEL certain clarifications regarding the trades. NSEL promptly replied to this notice but for a year and half after the show cause notice, no action was taken by the Ministry. Instead, merely on the recommendation of the FMC, it ordered sudden and abrupt closure of NSEL on July 12, 2013. Shockingly enough, the same FMC did a U-turn, and on July 19, 2013 wrote to Department of Consumer Affairs (DCA) stating that the exemption notification was silent on whether the exemption was applicable to all or specific provisions of the FCR Act. As per the orders of the DCA, NSEL suspended trading on July 31, 2013. This sudden and abrupt closure of the Exchange market led to the payment default of Rs 5600 crore.In fact, NSPOT did not even reply to the show cause notice sent to it by the DCA. Still, no action was taken against it. On the other hand, unlike at NSEL which was directed on 12 July 2013 to close the running contracts on their maturity, and not to launch any fresh contracts, NSPOT was allowed a gradual closure over the next year and half. Had similar long-term arrangement been provided to NSEL, the payments crisis would not have occurred.Forensic audits by Choksi and ChoksiAfter petition by certain investors who wanted to derail the Eseries settlement by NSEL, the Bombay High Court directed the FMC to appoint a forensic auditor for Eseries products of NSEL. An audit firm by the name of Choksi and Choksi was given this assignment and their audit report had given a clean chit regarding the Eseries contracts on NSEL, which made the FMC give a NOC for Eseries settlement and over 40,000 genuine claimants of Eseries benefitted eventually.The role of the Promoters/FTIL/Jignesh ShahVarious courts including the Bombay High Court and investigative agencies probing the case have stated that no money trail has been traced to NSEL, FTIL or its promoters. The entire default amount has gone to the 24 defaulters/borrowers. Jignesh Shah also came on TV on 5 August 2013, and promised a financial settlement. Mr. Jignesh Shah also promised a committee of three to look into the scam.The role of Brokers/ArrestsSEBI has issued show-cause notices to the top five brokers namely Anand Rathi Commodities, India Infoline Commodities (IIFL), Geofin Comtrade, Motilal Oswal Commodities, and Phillip Commodities, on charges of mis-selling NSEL contracts by promising assured returns without ensuring delivery. Since the brokers have also been accused of indulging in massive manipulation of client KYCs, large-scale modification of client codes for doing multiple deals and infusion of unaccounted money through their NBFCs, SEBI has asked them as to why they should not be declared not “fit and proper” since they were found to have violated securities regulations. In the notice, SEBI, has conveyed to these errant brokers that ‘it is alleged that your continuance as a market intermediary in the securities market is detrimental to the interest of this market…’ In the first show-cause notice, the allegations include several irregularities/violations such as false assurances to investors, wrong and misleading statements, arbitrage products sold with assured returns and as risk-free products, funding of clients and client code modification for those trading on NSEL. “For grant of certificate of registration, the application has to be a fit and proper person in terms of regulation of the Stock Brokers Regulations, read with Schedule II of the SEBI (Intermediaries) Regulations, 2008. Further, the conditions stipulate that the stock broker shall at all times abide by the rules, regulation, by-laws of the stock exchange and code of conduct as specified in Schedule II of the stock exchange regulations...it is alleged that your continuance as a market intermediary in the securities market is detrimental to the interest of this market," the SCN states. “Therefore, it is alleged that you are no longer a ‘fit and proper' person for holding the certificate of registration in the securities market." In the second show-cause notice, media reports said, SEBI sent notices to five broker firms, as it was not satisfied with the explanation offered by them on allegations of mis-selling. The SEBI officers have formed an opinion that the brokers should not be granted licences for commodity business.The Economic Offences Wing (EOW) of Mumbai Police also found evidence of large scale irregularities on the part of these brokers in the NSEL case. A forensic audit by the EOW also revealed hawala transactions, benami trades and client code modifications by these brokers. The NSEL Investors' Action Group (NIAG) – a forum of NSEL investors requested the EOW to take strict action against these brokers who “falsely sold NSEL as an 'arbitrage product.' Several key brokers including Motilal Oswal undertook Power of Attorney to buy/sell/receive/deliver NSEL commodities on behalf of the investors and also opened DMAT (dematerialized) accounts to handle warehouse receipts of commodities in electronic form. “These brokers have also been accused of criminal breach of trust for parting with investors' monies without securing warehouse receipts as promised," the NSEL investors said in a letter to the Commissioner of Mumbai Police. The Hon. Bombay High Court in its judgment dated August 22, 2014 also observed that "…brokers do have their own legal team and a full knowledge of how the market operates. The legalities of the transactions were quite expected to be known to the brokers … the brokers being quite experienced, and the investors being informed persons, it is apparent that the issue of illegality of the transactions raised by them is not out of their concern to adhere to legalities, but in order to project the applicant (Mr Jignesh Shah) as the main offender, rather than the defaulting parties. On March 3, 2015, the EOW, Mumbai arrested 3 top brokers in the NSEL case. Those arrested were Amit Rathi, managing director of Anand Rathi Financial Services Ltd; C P Krishnan of Geojit Comtrade Ltd; and Chintan Modi of India Infoline Ltd (IIFL).The three were charged with mis-selling NSEL products, cheating, forgery and criminal conspiracy, among other charges.Role of auditors/Mukesh P ShahEditMukesh P Shah who is a maternal uncle of Jignesh Shah has been internal as well as external auditor of NSEL from time to time. Mumbai police while opposing his anticipatory bail confirmed that he was doing insider-trading in FTIL shares and by virtue of possession of FTIL shares alone he should have been disqualified as an auditor. Besides,Mumbai police has confirmed that most companies of 'Rawal Group' where La Fin Financial Services P. Ltd. (promoter of FTIL) had a stake were registered at NSEL at the address of Mukesh Shah and Mukesh Shah was the auditor of all these companies which traded on NSEL to the tune of 1352 Crores and moved out in May–June 2013 without losing a penny showing their knowledge of the scam. [46]Anjani Sinha's custodial statementAnjani Sinha, the sacked CEO and the MD of the company, confessed and owned up the entire responsibility of the crisis in his first affidavit. However, after his arrest, he did a complete U-turn retracting his earlier affidavit. In his custodial statement to the EOW authorities, Anjani Sinha squarely blamed Jignesh Shah and even called him ‘mastermind’ of the entire crisis. Sinha also claimed that Shah forcibly took away the passports belonging to him and his wife and made them sign confessional statements which were allegedly drafted by FTIL. However, later on, in a statement to the Enforcement Directorate, Sinha disowned his custodial statement to the EOW and admitted to the contents of his first affidavit.NSEL–FTIL mergerOn 21 October 2014, invoking Sec. 396 of the Companies Act, 1956, the Ministry of Corporate affairs announced a draft order for merger of NSEL, a subsidiary of FTIL. All stakeholders were given 60 days to report to MCA. FTIL challenged this merger in Bombay HC. Hearing an application filed by the government, the Bench comprising Justices SC Dharmadhikari and BP Colabawala granted the govt time till 15 February 2016. On 12 February 2016, the MCA passed the final order of merger between FTIL and NSEL. This order has been challenged by FTIL in Bombay High Court and it is stayed till the arguments will be heard on merit. Based on MCA’s own circular dated April 20, 2011, it is a known fact that for any merger to materialize, permission of 100% shareholders and 90% creditors needs to be obtained. By forcing the merger on 63,000 shareholders of FTIL without so much as giving them a chance to consent/object to the amalgamation, MCA not only went against its own circular but also against Article 14 of the Constitution. The forced merger violates the sacrosanct concept of ‘limited liability’ and is not in public interest. Third, the “corporate veil” between NSEL and FTIL cannot be lifted until the so-called “parental fraud” by FTIL is proven in a court of law. The issue is currently sub judice.MCA's move to take over FTIL boardEditOn 28 February 2015, even as the MCA had gone ahead with its idea of forced merger, it moved a petition before the Company Law Board now known as the National Company Law Tribunal (NCLT) to take over the board of FTIL and replace it with govt. nominated directors. FTIL challenged this, too. On 30 June 2015, the NCLT barred FTIL from selling its assets which was promptly stayed by the Madras High Court on appeal by FTIL. However, on 19 April, the Supreme Court reversed this stay and froze all assets of FTIL barring day to day expenses. It is noteworthy that it is unlawful to takeover and regulate the affairs of a listed Company based on erroneous assumptions, that too, after almost 20 months without ascertaining the alleged ‘oppression’ and ‘mismanagement’ under Sec 397 & 398 of the Companies Act, 1956. The MCA also invoked Sections 401, 402 and 408 requesting NCLT for takeover or dissolution of FTIL Board. Interestingly, the Union Ministry of Law and Justice, in its opinion dated June 4, 2014, clarified that the said sections are not applicable to FTIL-NSEL case. Sharing his legal opinion with the MCA, the deputy legal advisor in the Ministry of Law and Justice, said that “Section 397 might not apply as NSEL which is (almost) wholly owned subsidiary of FTIL and NSEL’s majority shareholders (i.e. FTIL) have never acted in any manner which could be termed as ‘oppressive’ against the minority shareholder of the company. Section 398 might also not be applicable as fraud and acts and mismanagements were allegedly done by the key officials and employees of NSEL and not FTIL and different statutory auditors have issued clearances to them.” NSEL also made necessary changes in its management and board after the crisis came to light. Despite this, the MCA has sought to replace the reconstituted Board of FTIL when no wrongdoing is found. This is seen as a clear attempt to suppress / destroy the evidence against the errant brokers and FMC, then the regulator of commodities markets.Financial Intelligence Unit (FIU)'s ObservationFIU (under Finance Ministry) held that NSEL came under the purview of Forward Contracts (Regulation) Act (FCRA) and therefore guilty of failing in several of these obligations under the law. The black money watchdog has slapped a penalty of Rs 1.66 crore for several counts of violating the provisions of Prevention of Money Laundering Act (PMLA) on NSEL. The watch dog further held that failures is deliberate and willful and hence, invite penalties. NSEL is fined Rs.1 lac for each failure and the collective fine was Rs.1.66 crore.SFIO ProbeThe Government of India ordered SFIO (Serious Fraud Investigation Office) probe on FTIL and its 18 associates, brokers and defaulters pertaining to irregularities on NSEL. SFIO has sent a 6-page questionnaire to all the trading clients in NSEL demanding to know whether brokers played a role in ‘inducing’ them to trade in the commodities. The SFIO has also queried trading clients on alleged non-payment of value-added tax at the time of trading.Court quashes allegations against MCXA Metropolitan Court quashed allegations of a 900 Cr scam at MCX. This is the latest update in response to an earlier FIR filed by Mumbai Police raising questions of insider trading at MCX. The court in its findings cited an audit report conducted by PWC, ruling that it was based on hearsay and dismissed the protest petition. It however accepted the C-summary report filed by the investigating officer.Insider trading related to NSEL scamThe Security and Exchange board of India (SEBI) has found various FTIL/MCX directors guilty of insider trading when the NSEL scam was being unveiled.Sucheta Dalal's knowledge of NSEL scamIt was discovered that even 15 months before the NSEL scam went public, India's leading financial journalist Sucheta Dalal knew all major aspects of the fraud. An email dated 8 May 2012 from Sucheta to Jignesh Shah, Anjani Shah etc. came in public domain which revealed that Sucheta knew about illegality and lack of safety of NSEL product. A complaint has been filed with Mumbai police by NSEL Investors' Action Group to investigate Sucheta Dalal's role. Sucheta knew about illegality of contracts, role of IBMA and the fact that the warehouses were in so called borrowers' own premises.Chargesheets by Agencies in NSEL caseThe CBI has filed a charge sheet against FTIL, Jignesh Shah, NSEL and various shell companies in NSEL scam matter. The EOW of Mumbai police has also filed chargesheet against Jignesh Shah which lists out how Jignesh Shah cooked the books of NSEL.Source: NSEL case - Wikipedia