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CURRENT AFFAIRS
INTERVIEW FOR RBI GRADE B EXAM IN MARCH 2014 - PART 2

NPAs

Continuing our discussion on NPAs, ICICI Bank, the biggest private sector bank and the second biggest commercial bank in the country ( SBI is the biggest) has reported nearly 100 % increase in Restructured assets in this quarter compared to the same quarter last year (the amount is Rs 1000 crores ) and another Rs 2000 crores restructured assets in the pipeline. (as per CNBC TV 18 news channel today evening). Thus, all banks are having asset quality problem. Why? Owing to economic slowdown ? Why ? Owing to lesser and lesser investments ? Why ? Outbound FDI is more than inbound FDI. Even Indians are more interested investing abroad ? India's ease of doing business index rank is pathetic ? Why ? etc etc....(we cannot start a sentence with due to ....Why ? This is Grammar)

29 JAN 2014 --TOPIC : INFLATION

On inflation, one can write pages and pages. RBI is slowly moving towards CPI which is 100 % correct. WPI is of no relevance to the common man. But CPI is more than 9 % for a long time and therefore , repo rate should be around 10 % . But this will affect the industry. But RBI cannot be blamed because if APMC act is abolished and if the supply chain bottlenecks are removed, CPI inflation may fall to 5 % also, in which case RBI will automatically reduce the repo rate. Our fiscal deficit position is pathetic. With GDP growth around 5 %, and if RBI lowers the interest rate in such a high fiscal deficit scenario, inflation may shoot up further . Further , inflation means less purchasing power of rupee and if the bank deposit interest rate is less than the CPI inflation rate, it means depositors are becoming poorer and the economy will be affected ..(more on this within 2 or 3 days)

11 Nov 2013 Current Affairs

11 Nov 2013 Current Affairs The country celebrates the 125 th birth anniversary of Bharat Ratna Moulana Abul Kalam Azad, who laid the foundation of Modern Education System in India India’s sovereign rating by S & P is BBB- with a negative outlook MGNREGS = Mahatma Gandhi National Rural Employment Guarantee Scheme. One-third of those given employment should be women. In 2012-13, women accounted for 51 % of person-days provided employment under MGNREGS ASEM = Asia Europe Meeting (The Asia–Europe Meeting (ASEM) was officially established in 1996 at the first summit in Bangkok, Thailand. ASEM is an interregional forum which consists of 28 members of the European Union (EU), the European Commission, the 10 members of ASEAN, the ASEAN Secretariat, China, Japan, and the Republic of Korea as of 2008,[1] India, Mongolia, and Pakistan, Australia,Russia and New Zealand as of 2010,[2] and as of 2012 Bangladesh, Norway, and Switzerland. The main components of the ASEM process are the following so-called three pillars: Political Pillar Economical Pillar Social, Cultural and Educational Pillar Warsaw (Poland Capital) climate talks begin UN climate negotiations. delegates from more than 190 countries . UNFCCC = United Nations Framework Convention on Climate Change

RBI Gr B Qn paper 2012 Exam held on 10 Nov 2013

PAPER III FINANCE AND MANAGEMENT- Section I

Qn 2 ) "High inflation is a source of internal and external equillibrium " - Explain the statement with reference to CAD and weakening of the rupee ANSWER : Some points : High inflation means less savings unless growth is very high. In India, growth is slowing but CPI inflation is not falling and is around 10 %. People will naturally save less . And CAD definition is (savings shortfall etc..) High inflation makes our products less competitive, exports will come down, CAD will go up + REER takes into account inflation differentials between India and (say) USA and to that extent rupee should weaken. IF CAD worsens ,its a real problem because ....Either way its a problem..... many qns qill be analysed ...please see this page

17 SEPTEMBER 2012 . UPDATE ON CURRENT AFFAIRS

DIESEL PRICES INCREASE - WHAT WILL BE THE EFFECTS ON INDIAN ECONOMY.

WHATEVER I AM WRITING HERE ARE NOT MY OWN VIEWS. EVERYDAY, I READ, ECONOMIC TIMES, FINANCIAL EXPRESS, BUSINESS LINE, BUSINESS STANDARD, MINT, FINANCIAL CHRONICLE, HINDU, INDIAN EXPRESS ,TIMES OF INDIA APART FROM WEEKLY/FORTNIGHTLY MAGAZINES SUCH AS FRONTLINE, BUSINESS TODAY, BUSINESS INDIA, ECONOMIC AND POLITICAL WEEKLY, OUTLOOK, ETC. I AM SUMMING UP THE VIEWS OF MANY EXPERTS HERE. SOMEWHERE I HAVE READ THAT increasing diesel prices by Rs 5, will reduce the subsidy bill by around Rs 30,000 to 40,000 crores. But some state Govts have already told that the losses of transport corporations will increase . If we calculate , the total burden on all state govt undertakings will be atleast around Rs 4000 crores . If they pass on the hike to the passengers, then the passengers will spend more on transport and the savings rate in India which is already going down will suffer further. We have to find how much diesel is used by farmers. They all will be affected and if they pass on the cost, inflation will go up. Transportation costs will certainly go up and inflation will go up because of this also. If because of this Rs 5 diesel hike, inflation goes up by say 1 % (due to multiplier effect-as railway freight charges will go up. cost of chairs etc will also go up, etc.) , then RBI will have to raise interest rates by 1 % , which in turn will affect the economy. Already due to QE III in USA, commodity prices are going up throughout the world and this also will push up our inflation. The profit margins of various companies may also get affected due to increased transportation cost and increased raw material costs and already the experts in textile industry in Coimbatore have voiced grave concern about the diesel price hike. Therefore, is the diesel price increase ,the right step. Answer - tomorrow

INTERVIEW -ACTUAL QUESTIONS ASKED

ACTUAL QUESTIONS ASKED TO SOME OF OUR STUDENTS IN IOB CLERICAL INTERVIEW BEING HELD THIS MONTH I.E.AUGUST 2012

What is Dumping.. What is ECGC ? WHAT is NABARD,LEAD BANK SCHEME. WHAT DO you know about IOB ? Why are u coming to banking after doing BE ? Twitter Face book banning... REPO rate, bank rate definitions.. qns about anti corruption movement in Newdelhi...

RBI Grade B -Actual interview qns asked to some of our students in 2012 and 2011

GDP deflator. Securitisation..What is M and A ...Mergers and acquisitions....What will happen if Indian Rupees go to Rs 25 (usdollar rupee rate) FDI in retail..is it good for India....about current job of the candidate...RBI functions.....

ARTICLE ON INFLATION - PART 3 -18 JULY 2012 . 9.55 AM

RBI Governor has spoken yesterday (17 July 2012) about the desirability of producer price index (PPI) . Students can see the details in the RBI Website and in newspapers Hindu, Economic Times etc.about RBI Governor’s speech on WPI, PPI etc.- EXTRA INFORMATION IS GIVEN BELOW

What is PPI ? PPI measures the average change in the selling price received by the domestic producers of goods and services over time. WPI has been replaced by PPI in most of the countries, because of PPIs conceptual concordance with the system of national accounts and its use as a deflator. Measurement of price changes from producers’ and customers’ perspectives is considered far more relevant and technologically superior than their measurement at wholesale level ( for monetary policy formulations). WPI never measures price changes in the wholesale market. In UK , US and in several countries, CPI based inflation measure is favoured, for monetary policies. They also take into account other inflation indicators. In India, if we go by CPI, inflation is around 10 % . There is a proposal to increase diesel prices shortly. If that happens, the CPI inflation will go up further. Already, depositors are getting negative rate of return on their deposits. Therefore, the industry’s demand to reduce interest rates is incorrect (apart from other reasons) .If they want interest rates to be reduced, they, along with the Govt., should find a solution to the problem of high inflation. If inflation comes down and if fiscal deficit also comes down, RBI will reduce interest rates automatically. Our industrialists should concentrate on R & D, encourage talent and innovation.

RBI GRADE B MAIN EXAM RESULTS OUT. MATERIAL FOR INTERVIEW .03 JULY 2012 & 04 JULY 2012

INFLATION - There was a qn each on inflation in the RBI Exam Main paper (exam held in April 2012) in English section and in economic and social issues section.

Some experts are criticising RBI for the deceleration in GDP growth. They argue that the monetary tightening of RBI is the main reason why GDP growth has come down to around 6 %. But this criticism is not correct. Because (1) China, which always has higher growth rate than India, is also witnessing lower GDP growth (2) Though RBI has several objectives, its foremost objective is maintaining price stability. But critics argue that RBI has failed to control inflation, as monetary tightening has only affected growth but not lowered inflation. But RBI Governor has replied beautifully that, had RBI not resorted to monetary tightening, inflation could have gone up even further. When inflation as per CPI is around 10 % and inflation as per WPI is more than 7 %, the bank deposit interest rates should be around atleast 8 % (world over, inflation as per CPI is taken into account for policy measures and as per that logic, bank interest rates should be more than 10 % ). RBI Governor has already told that if deposit interest rates are less than inflation rate, then that is a disincentive for savers. What is important is inflation should be brought down first. APMC act should be amended. Our PM and FM have already told several times that , in our country , the difference between farm gate prices and retail prices is unacceptably high . Middleman jack up the prices .Our PMEAC Chairman has also told that APMC act has not helped the farmers. Therefore, APMC act should be amended first. (Maharashtra has done this. But full details awaited).............(rest tomorrow)

INFLATION ARTICLE -PART II- 04 JULY 2011

Some critics of RBI’s tight money policy argue that India’s growth should not be compared with China’s growth as China is export dependent and as a result of European crisis etc, China’s GDP growth has come down, whereas in the case of India , GDP growth has come down only because of RBI’s tight money policy of high interest rates. This argument also is incorrect because net exports have contributed virtually nothing to China’s GDP growth since 2009. Morever, China also has a huge domestic economy. If deposit interest rates are less than inflation rate, then it is known as ‘Negative rate of return ‘ and savers and the country will be losing their purchasing power to the extent of the negative rate of return. Some critics argue that for policy measures we should take into account only ‘core inflation’ and we should not include ‘food inflation’ etc. This is also not correct for India, as food consumption expenditure accounts for a major portion of the expenditure of various households. Efforts should be made to reduce inflation. If inflation comes down, RBI will automatically reduce interest rates. Moreover, RBI has also clarified that real effective bank lending interest rates today ,remain comparatively lower than the levels of high growth phase of 2003-08. This means factors other than interest rates are contributing more significantly to the growth slowdown. (more details tonight or tomorrow)

03 JUNE 2012 NEWS

HOW IN MANUFACTURING CHINA IS POWERING AHEAD AND INDIA IS A BIG ZERO AND THATS WHY OUR ECONOMY IS GOING DOWN THE DRAIN

In today's Times of India , a news item has come about a place called Chengdu in China . Every fifth PC or every second laptop in the world is running on a chip processed there. 207 of the fortune 500 companies have facilities there. Rents are regulated and cheap. Water , electricity also cheap. Wages higher than in India. 8 highways . 129 international flight connections. Unless we improve our infrastructure, invest in R & D , manufacture quality products and export, our economic problems will not be solved. It is really surprising why our Industrialists are not investing in R & D and are not manufacturing quality products, when our country has got so much talented Indians.

30 MAY 2012

RBI GRADE B MATERIAL PLUS GENERAL AWARENESS MATERIAL

In today's business line in page 14. there is an article "A mexican warning on retail FDI " ,wherein it has been mentioned that Walmart was doing fraudulent activities. FDI in manufacturing is the best for our country. Unfortunately, our Indian Industrialists are not investing in R & D and developing any product. If they do so, our exports will zoom and our current a/c deficit, BOP problems will be over. Since our Indian industrialists are not doing that, we have to promote and invite FDI in manufacturing vigorously. If we buy a sony laptop in India, it is made in China. Why cant Sony make that Laptop in India ? Is it due to infrastructure problems ? Indian Govt should concentrate on manufacturing vigorously to solve our BOP + other problems. HDFC Chairman has told in an interview in Hindu (dated 28 May 2012) that manufacturing is the solution for unemployment etc.

28 May 2012

INDIAN OIL POSTS HUGE Rs 12,670 crore quarterly net profit and say they are selling fuel below cost

http://in.finance.yahoo.com/news/indian-oil-posts-rs-12-102702179.html

25 JULY 2011

Which country has the lowest rating of any country in the world covered by MOODY'S.an international rating agency . answer. GREECE.

India's ranking on the list of countries attracting the highest foreign direct investment (FDI) in 2010 fell to 14th position with inflows declining to $25 billion as against $36 billion last year, according to a UNCTAD annual investment survey – World Investment Report 2011-released today. USA,China,Hong Kong and Belgium are in the top 4. Among major buyouts that figured in the UN report was Tata Steel's acquisition of UK-based Corus group worth $11.8 billion and Hindalco Industries's acquisition of US firm Novelis Inc worth $5.8 billion. Tata Motors also acquired UK-based Jaguar Cars for $2.3 billion, Essar Steel Holdings bought Canada's Algoma Steel Inc for $1.6 billion and United Spirits acquired Whyte & Mackay of UK for $1.17 billion.

24 JULY 2011

STATE BANK OF INDIA P.O.EXAM

Today,as per almost all students,the Data Interpretation questions were very tough (i.e.it was very difficult to answer them within the stipulated time). Our students also had a harrowing time...But if we practise mathematics everyday, speed will automatically come. I thank IBPS for setting such a tough question paper,as I am having love affair with Mathematics for the last several years.

23 JULY 2011

Govt. approved the proposal of Reliance Industries Limited to sell 30 percent stake in 21 oil and gas blocks to British Petroleum. This is a big ticket FDI. Value $ 7.2 billion

The Ministry of Rural Development has decided to set aside Rs 400 crores for payment to banks every year to deploy business correspondents in villages for faster payment of wages under MGNREGS. (Who can be appointed as business correspondents ?)

India's largest arbitrage broker - BLB Limited - shuts shop. FIIs have positions of Rs 70,000 crores in the F & O market in India. Experts say that these FIIs are wrecking havoc and are exploiting govt.rules.

$ 200 million ADB loans to build roads in North East.

Global Gender Gap Index 2010 --India's rank is 112---overall rank.. It is measured in 4 areas.....(1) Economic Participation and Opportunity (2) Educational attainment (3) Health and Survival (4) Political Empowerment

22 JULY 2011

New India Assurance,the country's largest general insurance company suffers a loss for the first time in its 90-year history. (Net loss Rs 421 crores in 2010-11)

Bank of Baroda is India's fourth biggest lender in terms of assets.

Food Inflation falls to 7.58 %, the lowest since March 2009.(Food items contribute 14 % to headline inflation. What is the difference between Core Inflation and Headline Inflation) ? (Inflation many be down due to base effect. What is base effect ?

19 JULY 2011

GENERAL AWARENESS

HEREAFTER THIS SECTION WILL BE UPDATED EVERYDAY

1) Gold touches new peak.Investment in Gold is viewed as a safe haven investment,especially in the backdrop of the US debt crisis, Eurozone problems etc. 2) Banks request RBI not to increase interest rates hereafter. The cost of funds for the banks has gone up due to increase in deposit rates. But the credit growth is sluggish and the profits for the banks will naturally be hit. 3) FMP = Fixed Maturity Plans (applicable to mutual funds)

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