Reserve Bank of India grants banking licences for two kinds of banking, namely, Universal bank Licence and Differentiated Bank licence. Payment Banks comes under differentiated bank licence since it cannot offer all the services that a commercial bank offers.

A payment bank cannot lend, it cannot issue credit cards but can take deposits up to Rs. 1lakh per account.

Objective: Main objective of Payment banks is to work towards Financial inclusion by providing small saving accounts and payment/remittance services to migrant labour workforce, low income households and other unorganized sectors.

Work Allocation: Other than remittance and saving services, a payment bank can work as business correspondence  of another bank. They can also distribute simple financial products like mutual fund units and insurance products. Continue reading


As some people are thinking, cracking Bank exam is not a Difficult task. You don’t need to attain any supernatural powers for this. All that you need are one table spoon hard-work, one table spoon good material and two table spoons practice. Thats it!!! These ingredients are enough to make your life DELICIOUS. We are ready here with good material. Its up to you to add the remaining tablespoons and make it delicious. If you are EXPECTING some tips, then here they are 

  1. Make a Time Table and STRICTLY follow that. 
  2. Refer to all the topics in your syllabus and find out which topics are easier and less time taking while solving. Make a list of them, easiest to toughest. Try to solve the easiest first. This will help you to increase your confidence. But dont waste much time on them. 
  3. Try to cover all topics, Dont go for IMPORTANT ones. As we all know, there are NO important parts in competitive exams. All topics have equal importance. 
  4. The purpose of Practice and Previous papers is to help you while practicing only. Dont prepare according to them. 
  5. Believe God, but no BLIND beliefs. I mean, God will help you to GET a good rank, if you work hard and perform well. But he dont write your Exam. What i mean to say is “Karmanye vadhikaraste, ma Phaleshu kadhachana” (Focus on your work, I will take care of the Outcome – Bhagavadgita). No God told you that “Focus on me , i will do your work”. God is God, dont make him your servant. 
  6. Stop BLIND GUESSING in exam hall. Because one negative mark can change your LIFE!!! 
Ok, thats all for now friends. I’ll Update this post if i get any new Ideas 🙂 All The Best


In a boost to banks, which are facing rising asset quality issues, the Reserve Bank of India, on Wednesday, allowed such lenders to reverse the excess provision on sale of bad loans to their profit and loss account, provided the transaction took place before February 26, 2014.

The central bank had on the February 3 monetary policy day had said that it would issue the final guidelines on this front after banks requested it to include the provision to those sales took place before February 26, 2014, as well.

The move is aimed at incentivising banks to recover appropriate value in respect of NPAs (non-performing assets).
Almost all banks, including private sector players, have been reporting higher NPAs and lower profits as they have to make more provisions for bad loans, which crossed 5.5 per cent as at the end of December. Together with restructured loans, the total pain on the system is close to 12 per cent.

The new guidelines extending the sale period prior to February, 2014, will help banks report better numbers and, thus, take a little pain off their back. From April 1, banks will have to make full provision — 5 per cent of the bad asset — if they have restructured the loan, and the entire amount if the asset in corporate debt restructuring (CDR) turns bad.

How The Investment Under National Pension Scheme Is Taxable

Members of private provident fund trusts need not have to pay tax on premature withdrawals if the amount is either less than Rs. 30,000 or their tax liability is nil even after including the withdrawn sum to their income. A proposal to this effect is contained the Budget 2015-16. As per existing provisions in respect of such premature withdrawal, the trustees of the recognised provident funds (trusts) shall deduct tax as computed at the time of payment.

Under the existing EPF & MP Act (Employees’ Provident Funds and Miscellaneous Provisions Act), withdrawal shall be taxable if the employee makes withdrawal before continuous service of five years (other than the cases of termination due to ill health, closure of business, etc) and does not opt for transfer of balance to new employer. It is proposed to insert a new provision in the Act for deduction of tax at the rate of 10 per cent on premature withdrawal from Employees Provident Fund Scheme (EPFS).


Mutual Funds:

Mutual Funds are the professionally managed instrument that pools money fro the investors and invest in securities like stocks, bonds, short term money market instruments and commodities such as precious metals.Mutual funds offers an attractive way to manage savings in passive manner without paying high fees or constant attention from individuals of market. Since these funds are managed by professional fund managers hence it doesn’t requires good knowledge of traditional market and also free from complex investment decision.

Mutual Funds Set Up:

A mutual fund is set up in the form of trust that has a Sponsor, Trustees and Asset Management Companies. A trust is established by a Sponsor who is like a promoter of company and this trust is registered with SEBI as mutual fund. The Trustees of the mutual fund hold its property for the benefit of its unit holders. An Asset Management Company approved by SEBI manages the fund by making investments in various type of securities.

Operating A Mutual Fund:

A mutual fund company collects money from several investors and invest it in various options like stocks, bonds etc. This investment is managed by professionals who had good knowledge of market and tries to accomplish growth.
Investors get unit of funds according to amount they have invested. AMC is responsible for managing the investment from the various schemes operated by mutual fund.

Net Asset Value:

Mutual Funds are operated on the basis of NAV. Net Asset Value is the total asset value per unit of the fund and is calculated by the Asset management Companies at the end of every business day.

Types Of Mutual Fund:

Based on the maturity period

  • Open-ended Fund An open-ended fund is a fund that is available for subscription and can be redeemed on a continuous basis. It is available for subscription throughout the year and investors can buy and sell units at NAV related prices. These funds do not have a fixed maturity date. The key feature of an open-ended fund is liquidity.
  • Close-ended Fund A close-ended fund is a fund that has a defined maturity period, e.g. 3-6 years. These funds are open for subscription for a specified period at the time of initial launch. These funds are listed on a recognized stock exchange.
  • Interval Funds Interval funds combine the features of open-ended and close-ended funds. These funds may trade on stock exchanges and are open for sale or redemption at predetermined intervals on the prevailing NAV.


  • Professionally Managed
  • Diversificaton
  • Liquidity
  • Low transaction cost
  • Well regulated

Risks Involved In Mutual Fund:

Mutual funds invest in different securities like stocks or fixed income securities, depending upon the fund’s objectives. As a result, different schemes have different risks depending on the underlying portfolio. The value of an investment may decline over a period of time because of economic alterations or other events that affect the overall market. Also, the government may come up with new regulations, which may affect a particular industry or class of industries. All these factors influence the performance of Mutual Funds.
  • Risk and Reward: The diversification that mutual funds provide can help ease risk by offsetting losses from some securities with gains in other securities. On the other hand, this could limit the upside potential that is provided by holding a single security.
  • Lack of Control: Investors cannot determine the exact composition of a fund’s portfolio at any given time, nor can they directly influence which securities the fund manager buys.


Indian Banking Structure

a) Central Bank (RBI)
b) Specialized Banks
c) Commercial Banks
d) Development Banks
e) Co-operative Banks

Central Bank:

As its name signifies, a bank which manages and regulates the banking system of a particular country. It provides guidance to other banks whenever they face any problem (that is why the Central Bank is also known as a banker’s bank) and maintains the deposit accounts of all other
banks. Central Banks of different countries: Reserve Bank of India (INDIA), Federal Reserve System (USA), Swiss National Bank (SWITZERLAND), Reserve Bank of Australia (AUSTRALIA),
State Bank of Pakistan (PAKISTAN).

Specialized Banks:

Those banks which are meant for special purposes. For examples: NABARD, EXIM bank, SIDBI,
NABARD: National Bank for Agriculture and Rural Development. This bank is meant for financing the agriculture as well as rural sector. It actually promotes research in agriculture and
rural development.

EXIM Bank: Export Import Bank of India. This bank gives loans to exporters and importers and

also provides valuable information about the international market. If you want to set up a
business for exporting products abroad or importing products from foreign countries for sale in
our country, EXIM bank can provide you the required support and assistance.

SIDBI: Small Industries Development Bank of India. This bank provides loans to set up the small scale business unit / industry. SIDBI also finances, promotes and develops small-scale industries

whereas IDBI (Industrial Development Bank of India) gives loans to big industries.

Commercial Banks:

Normal banks are known as commercial banks, their main function is to accept deposits from
the customer and on the basis of that they grant loans. (Loans could be short-term, medium term
and long-term loans.) Commercial banks are further classified into three types.
(a) Public sector Banks
(b) Private sector Banks
(c) Foreign Banks
(a) Public Sector Banks (PSB): Government banks are known as PSBs since the majority of their
stakes are held by the Government of India. (For example: Allahabad Bank, Andhra Bank, Bank
of Baroda, Bank of India, Bank of Maharastra, Canara Bank, Central Bank of India etc).

(b) Private Sector Banks: In these banks, the majority of stakes are held by the individual or

group of persons. (For example: Bank of Punjab, Bank of Rajasthan, ICICI Bank, Axis Bank etc).

(c) Foreign Banks: These banks have their headquarters in a foreign country but they operate

their branches in India. For e.g. HSBC, Standard Chartered Bank, ABN Amro Bank etc.

Development Banks:

Such banks are specially meant for giving loans to the business sector for the purchase of latest
machinery and equipment’s. Examples: SFCs (State Financial Corporation of India) and IFCI
(Industrial Finance Corporation of India).

Co-operative Banks:

These banks are nothing but an association of members who group together for self-help and
mutual-help. Their way of working is the same as of commercial banks. But they are quite
different. Co operative Banks in India are registered under the Co-operative Societies Act, 1965.
and regulated by the RBI.