IBPS Clerical CWE will have a section dedicated to General Awareness with focus on Baking and related questions.

Here are some topics that may be asked in the exam. Do let us know if they are helpful.

Interest rates on PPF, post office saving schemes hiked

The government on November 11, 2011 increased interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme (MIS) and Public Provident Fund (PPF).

While post office savings accounts (POSA) will fetch 4 per cent interest, up from 3.5 per cent, MIS and PPF will earn an interest of 8.2 per cent and 8.6 per cent respectively.

The maximum increase is in the one-year fixed deposits – from 6.25 per cent to 7.7 per cent. The interest rate on other time maturities has been hiked as well. The new rates will be applicable from the date of notification which will be announced soon.

The decision to hike interest rates, which is in line with the recommendations of Shyamala Gopinath Committee, will make small savings schemes more attractive and returns would be in sync with market rates.

The government has decided to discontinue the Kisan Vikas Patras (KVPs).

The government has lowered the maturity period for MIS and National Savings Certificates (NSCs) to five years from existing six years. It also introduced the National Savings Scheme (NSC) with 10-year maturity.

The annual investment ceiling in PPF savings has been increased to Rs one lakh from the present limit of Rs 70,000, but it would be costlier to obtain loans from the savings under as lending rate has been doubled to two per cent.

The government has scraped five per cent bonus on MIS and has also done away with commission for agents on PPF and Senior Citizens Savings Schemes.

The finance ministry also said the payment of commission on PPF schemes and senior citizens savings scheme will be discontinued and the agency commission under all other schemes (except Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) agents will be halved to 0.5 per cent.

In line with Shyamala Gopinath Committee’s suggestions, the government also decided to align rate of interest on small savings schemes with G-Sec rates of similar maturity, with a spread of 25 basis points (bps) with two exceptions. The interest rates for every financial year will be notified before 1st April of that year.

It further said the minimum share of states in net small savings collections in a year for investment in state government securities will be reduced from 80 per cent to 50 per cent. The remaining amount will be invested in central government securities or lent to other willing states or in securities issued by infrastructure companies/agencies, wholly owned by central government.

S&P upgrades India’s banking sector

A day after Moody’s downgraded Indian banking sector outlook from stable to negative, Standard & Poor’s (S&P) on November 10, 2011 upgraded the sector from group ‘6’ to group ‘5’. “Dependence on stable bank deposits due to an extensive branch network and limited dependence on external borrowing made India’s banking system low-risk on system-wide funding,” said S&P.

The S&P’s BICRA (banking industry country risk assessment) rating pegs India at 5, a notch higher than before. The assessment is on a ‘1 to 10’ scale with ‘1’ signifying the lowest risk and ‘10’ the highest. Other countries in BICRA group ‘5’ are China, Portugal, Thailand and Turkey.

It also revised India’s economic risk score from ‘6’ to ‘5’ and assigned an industry risk score of ‘5’.

S&P said that the Indian Government was highly supportive of the banking system. The Centre provided timely support to recapitalise (infuse capital to grow) banks and supported weaker banks by merging them with stronger ones.

However, S&P pointed out that “though Indian banking regulations were in line with international standards, including corporate governance, disclosures were somewhat inadequate.”
It said India’s economic resilience was constrained due to low annual income per head (estimated per capita GDP of $1418 in 2011) and a persistent high gap between Government revenue collections and spends (fiscal deficit).

The agency observed that risk to economic imbalances was low as bank credit to private sector had increased marginally (1.48 per cent in the last four years) while India’s external position was resilient.

S&P said the credit risk in the Indian economy was high due to a weak payment culture and a legal system which often resulted in low recoveries and delayed settlement of prepaid loans (foreclosures).

S&P talk
Indian Government is highly supportive of the banking system
India’s economic resilience is low due to low annual income per head and a high gap between government income and expenditure
Banking regulation in line with international standards
Governance standards arc generally adequate though disclosures arc somewhat inadequate
Weak payment culture and legal system often result in low recoveries and delayed settlement of foreclosures
Bank profits are stable but returns are lower than their corporate counterparts
High dependence on deposits and limited ability to borrow from debt capital markets which lack depth

Moody’s downgrades rating of Indian banks

Global ratings firm Moody’s on November 9, 2011 downgraded the entire Indian banking system’s rating outlook from “stable” to “negative,” citing the likely deterioration in asset quality in the months ahead.

Arguing its case for the outlook downgrade in the wake of the economic growth slowdown that could impact the asset quality and profitability of the Indian banking sector, the Moody’s said: “with asset quality, given the tightening environment, we anticipate that it will deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in FY’12 and FY’13.”

The decision has evoked sharp reactions from the government and bankers alike. Indian bankers termed the move “unwarranted” and “premature” at this point of time. The government dismissed the step as of “no significance,” saying the country’s lending institutions are much healthier than their global counterparts. The government sought to brush aside the Moody’s prognosis as a non-issue. “We are not concerned. We are not affected by the downgrade. Looking at how the global banks are faring, we are much stronger and the ratings have no significance,” Financial Services Secretary D.K. Mittal said.

Draft Real Estate Regulation Bill unveiled

Builders will have to register themselves before launching housing projects, stick to the approved plans and refund money to homebuyers in case they default, according to the new Real Estate (Regulation & Development) Bill 2011 released by Union minister for housing and urban poverty alleviation, Kumari Selja on November 9, 2011. The objective of the new law is to bring in more accountability and transparency in land and home transactions. The government has proposed setting up a Real Estate Regulatory Authority, which will monitor builders and protect consumer rights in the sector.

The Bill is expected to be passed in the winter session of Parliament, but the ministry has sought the real estate industry’s feedback within the next 30 days. Builders said the provisions are unusually harsh and would oppose them.

The draft has also recommended that builders set up a separate escrow account to compulsorily deposit 70% of the funds received from buyers and to ensure that these funds are used for that real estate project only. An earlier draft had proposed that the developers would submit bank guarantees.

The draft has also said that the promoters will be obliged to stick to the approved plans and project specifications and provide all information to the buyers who have booked apartments, which includes site plans along with structural designs and specifications.

The builders, who intend to sell any immovable property, will have to register with the Real Estate Regulatory Authority for accreditation, except for when the area of the land being developed does not exceed 4,000 sq mt. But the developer will have to make an application to the authority disclosing details about the project, including land status, approvals and contractual obligations for the registration process.
No builder will be allowed to issue or publish an advertisement or prospectus or start booking of flats in a project without obtaining registration from the authority.

The builders will also have to refund moneys in cases of default. If the developer wilfully fails to comply with the norms they shall be punishable with imprisonment for a term of up to three years or a penalty which may extend to a tenth of the estimated cost of the real estate project, or both. Builders have opposed the imprisonment clause and have said it can be misused and heavy financial penalty is more than enough. “The bill aims at restoring confidence of the general public in the real estate sector and ensure transparency, disclosure and accountability in the real estate sector,” said Selja. She said that the bill proposes to strike a balance between encouraging regulated growth and development as well bringing in more accountability in the sector.

The draft has proposed the formation of a nodal agency called the Real Estate Regulatory Authority in each state to co-ordinate efforts regarding development of the real estate sector and offer necessary advice to the state governments and centre for a “transparent, efficient and competitive real estate sector.” The authority will also establish dispute resolution mechanisms for settling disputes between developers and buyers.


  •   Developers will have to make an application to the authority disclosing details about the project, including land status, approvals & contractual obligations
  •   No builder will be allowed to issue ads or prospectus or start booking flats without obtaining registration from the authority
  •   Real Estate Regulatory Authority to monitor all building projects
  •   Jail up to 3 years or penalty up to 10% of project cost for builders who fail to register their projects
  •   Builder to compensate if flat buyer suffers loss because of misleading advertisement
  •   Builder to rectify structural defects in first year at his own cost
  •   Builder to deposit 70% of sum collected from buyers into a bank a/c

After 3 months from issue date, cheques won’t be accepted – RBI:

The Reserve Bank of India (RBI) on November 6, 2011 said cheques presented after three months from the date of issue would not be accepted in banks. This would be effective from April 1, 2012. Currently, cheques presented up to six months after the date of issue are accepted. The guideline applies to drafts, pay orders and bankers’ cheques as well. RBI said some people were taking undue advantage of the current practice, and these instruments were being circulated in the market like cash for six months. It added it was necessary, in public interest and in the interest of banking policy, to reduce the period within which these instruments are presented for payment from six months to three months from the date of issue. The banking regulator also issued a notification asking banks to strictly adhere to norms and issue pass books to savings bank account holders asked to do so, instead of issuing computer-generated account statements even when customers desired pass books. RBI said banks were not permitted to credit ‘account payee’ cheques to the account of any person other than the payee named, unless payees of such cheques were members of co-operative credit societies, and the amount did not exceed Rs 50,000.

RBI cancels co-op bank licence, penalises 4 banks:

The Reserve Bank on November 12, 2011 cancelled the licence of Solapur-based Nagari Audyogik Sahakari Bank Niyamit due to financial insolvency. The Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and appoint a liquidator for the bank. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation under usual terms and conditions. Meanwhile, the central bank has imposed penalties between Rs 1 lakh and Rs 5 lakh on four Gujarat-based cooperative sector lenders for violation of various guideline including anti-money laundering norms and customer identification rules. The four banks are -- Municipal Cooperative Bank Ahmedabad, Ahmedabad Mercantile Cooperative Bank, Surat People’s Cooperative Bank and Shreenath Cooperative Bank.

Don't forget to check out the IBPS English sample paper that we posted earlier for CWE Exam.

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