Daily Quiz: UPSC Prelims Marathon – April 10, 2018

Primary objective of setting up of payments banks is to further financial inclusion by providing

(i) small savings accounts and

(ii) payments / remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users, by enabling high volume-low value transactions in deposits and payments / remittance services in a secured technology-driven environment. Payment banks can not give loans. Payment banks can accept deposits restricted to Rs. 1 lakh per customer, and are allowed to pay customers interest on the money that is being deposited. They can be used for either current accounts or savings accounts.

The payments bank are registered as a public limited company under the Companies Act, 2013, and licensed under Section 22 of the Banking Regulation Act, 1949, with specific licensing conditions restricting its activities mainly to acceptance of demand deposits and provision of payments and remittance services. It will be governed by the provisions of the Banking Regulation Act, 1949; Reserve Bank of India Act, 1934; Foreign Exchange Management Act, 1999; Payment and Settlement Systems Act, 2007; Deposit Insurance and Credit Guarantee Corporation Act, 1961; other relevant Statutes and Directives, Prudential Regulations and other Guidelines/Instructions issued by RBI and other regulators from time to time.

Small finance bank are set to undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.The minimum paid-up equity capital for small finance banks shall be Rs. 100 crore.

Key objectives of setting up of small finance banks will be to further financial inclusion by

(a) provision of savings vehicles, and

(ii) supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.

Consumer Price Index is a measure of change in retail prices of goods and services consumed by defined population group in a given area with reference to a base year. This basket of goods and services represents the level of living or the utility derived by the consumers at given levels of their income, prices and tastes. The consumer price index number measures changes only in one of the factors; prices. This index is an important economic indicator and is widely considered as a barometer of inflation, a tool for monitoring price stability and as a deflator in national accounts

Consumer price index in its primitive form didn’t have services in CPI (UNML) and CPI (AL). But with revised series all the three indices urban, rural and combined contains services in their basket.

Wholesale Price Index (WPI) is the index is the most widely used inflation indicator in India.  This is published by the Office of Economic Adviser, Ministry of Commerce and Industry.  WPI captures price movements in a most comprehensive way.   It is widely used by Government, banks, industry and business circles.   Important monetary and fiscal policy changes are linked to WPI movements.  It is in use since 1939 and is being published since 1947 regularly. 

Some of the major services like trade, hotels, financing, insurance, real estate and business services do not find mention in CPI or WPI.

GDP is the total value of goods and services produced within the country. It is criticized mainly on the ground that:

1. GDP does not take into account the sustainability of future GDP
2. GDP does not take into account the value of non-monetized activity
3. GDP does not differentiate between more or less productive economic activity.
4. It does not take into account work of housewife.
5. It excludes care economy
6. It excludes unpaid charitable work.

The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The IMF’s fundamental mission is to ensure the stability of the international monetary system. It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members.

The IMF oversees the international monetary system and monitors the economic and financial policies of its 189 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.

A core responsibility of the IMF is to provide loans to member countries experiencing actual or potential balance of payments problems. This financial assistance enables countries to rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while undertaking policies to correct underlying problems.

Unlike development banks, the IMF does not lend for specific projects. 

The IMF helps its member countries design economic policies and manage their financial affairs more effectively by strengthening their human and institutional capacity through technical assistance and training. The IMF aims to exploit synergies between technical assistance and training—which it calls capacity development—to maximize their effectiveness.

The Asian Development Bank was conceived in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world. Good governance is critical for development. The lack of it hinders the delivery of public services, promotes corruption, and inhibits economic development.

ADB promotes good governance processes and practices for inclusive participatory, and sustainable development in Asia and the Pacific.

The World Bank is an international financial institution that provides loans to developing countries for capital programs. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group, which is part of the United Nations system.

The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries reform certain sectors or implement specific projects—such as building schools and health centers, providing water and electricity

The World Bank’s official goal is the reduction of poverty. However, according to its Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of Capital investment.

A sovereign wealth fund (SWF) or sovereign investment fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally.

Industrial solid waste

The major producers of solid waste are:

• Thermal power plants producing coal ash/ fly ash;
• The integrated iron and steel mills producing blast furnace slag;
• Non-ferrous industries like aluminium, copper and zinc producing red mud and tailings;
• Sugar industries generating press mud;
• Pulp and paper industries producing lime mud;
• Fertilizer and allied industries producing gypsum;
• Hospitals producing bio-medical waste

FRBMA act follows point deficit targeting method instead of range deficit method.One of the objectives of the act is to aim for fiscal stability in the long run and not in the short run. Rest all the statements are true.