Banking Awareness PYQs

• Securitization is defined as the process where an issuer designs a financial instrument and list them as securities to earn money.
• These securities include shares, debentures, bonds etc.
• Securities are issued by companies to raise capitals for their projects and in return, company pays an interest or a share in the company.

• Malabo is the capital city of Equatorial Guinea.
• Equatorial Guinea is a country on the west coast of Africa sharing boundaries with Gabon and Cameroon.

• A company that exists only on paper and has no office and no employees, it may have a bank account, these type of companies are known as shell companies.
• They neither manufacture anything nor render any service.
• They are generally used to make financial transactions and could be used in money laundering, tax evasion, and other illegal activities.

• Reverse Mortgage system is defined as the loan for a senior citizen, who has a self-acquired or self-occupied home.
• It is designed for retired people who are not able to support themselves but have assets in the form of house properties.
• In a Reverse Mortgage, a senior citizen mortgages his property to a lender (bank), which then makes periodic payments to the borrower so that borrower can meet his monthly expenses.

• ‘PMLA’ stands for Prevention of Money Laundering Act.
• It is an act of parliament to prevent money laundering came into effect on July 1, 2005.
• Money laundering is the process of obtaining money from criminal activity like drugs dealing, terror activity etc.
• If found guilty in the Money Laundering Act, PMLA defines rigorous punishment from five to ten years.

• Reserve Bank of India (RBI) has approved the merger of Bharat Financial Inclusion with IndusInd Bank.
• Bharat Financial Inclusion is a non-banking-finance company that provides financial services to the poor borrowers.
• BFI focus on microfinance and provides small loans starting from ₹2,000 to ₹12,000.

• Union Finance Minister serves as the chairperson of Financial Stability and Development Council (FSDC).
• The council deals with issues relating to financial stability, financial sector development.
• It was formed on the recommendation of Raghuram Rajan Committee in 2010.

The correct answer is Bankruptcy

Important Points

• When a company or a person is unable to repay their outstanding debts, it is known as bankruptcy.
• Bankruptcy is imposed by court order and often initiated by borrowers.
• Insolvency and Bankruptcy Code, 2016 is the law of India that implement and governs single law for insolvency and bankruptcy.

Key Points

• A bankruptcy filing is a legal course undertaken by the company to free itself from debt obligations. Debts that are not paid to creditors in full are forgiven for the owners. Bankruptcy filing varies in different countries.
• In India, if you file for bankruptcy it will not go down well with your credit rating, which means that it may be tough for you to get a new loan if you plan to start afresh. However, it would save you from any financial trouble.

• Dilip C Chakraborty is the head of committee formed by Insurance Regulatory and Development Authority of India (IRDAI) to help the new Risk Based Capital (RBC) norms.
• Risk Based Capital (RBC) is a method to measure the minimum amount of capital that an insurance company needs to support its overall business operations.
• It is the additional money that the insurance companies must keep aside to meet the contingency if it arises.This money cannot be used for any other purpose.

• Gold Rush has been launched by Stock Holding Corporation of India Ltd.
• It is a simple way to own physical gold and store with most secured storage facility at Gold & Silver Refinery at, Mewat, Haryana.
• GoldRush offers customer to purchase gold starting from Rs.1,000.
• Buyer can withdraw and take physical possession of all or part of his gold holding at any time.
• Gold can be bought or withdrawn online 24 hours a day.
• Stock Holding is a Public Limited Company and a subsidiary of Industrial Finance Corporation of India Ltd (IFCI).