PCS PRELIMS 2012 results and combined mark list of all candidates

pcs prelims combined markslist

CURRENT ACCOUNT DEFICIT (CAD)

 The current account deficit (CAD) in a country's balance of payments measures the gap between import and export of goods, services and transfers.

This deficit is not necessarily a bad thing. Developing countries may run a CAD in the short term to increase local productivity and exports in the future. But in the long run, a current account deficit can sap economic vitality.

 HOW IS CAD FUNDED?

A deficit in the current account is funded by various capital inflows, including portfolio investments, external commercial borrowings, foreign direct investments and NRI deposits. nadequate resources to finance CAD may put pressure on the local currency.

WHAT IS THE IDEAL WAY TO FUND IT?

The best way to fund the current account deficit is through non-debt creating long-term inflows such as foreign direct investments. Volatile inflows like portfolio investments, sometimes referred to as hot money, could threaten the stability of the external sector balance sheet.

WHAT HAS BEEN INDIA'S EXPERIENCE?

Of late, India's current account deficit has widened to nearly 4% of GDP. At the same time, there have not been adequate capital inflows and this has led to a significant weakening of the rupee vis-a-vis the US dollar. As a result, the Reserve Bank of India has had to sell its stock of dollars to meet the dollar demand.

WHY ARE REGULATORS AND POLICYMAKERS CONCERNED?

Because there is very little that can be done to restrict the current account deficit as prices of essential items of imports are rising and exports are not picking up. A CAD not higher than 2.5% of India's GDP is considered prudent. The challenge before the government is to devise policies that will boost exports and reduce unnecessary imports such as those of gold.

How bank loans turn bad

WHAT IS A BAD LOAN?

An account is termed as a bad loan or NPA when a borrower fails to pay his bank monthly-equated installment. According to banking rules, a loan is classified as an NPA when the EMI, principal or interest component, is not paid within 90 days from the due date. When an asset ceases to generate any income, it's termed as a bad loan. There are classifications of loans — standard, sub-standard, doubtful and loss assets. In order to ensure that banks are not affected due to defaults, regulator RBI has mandated them to make provisions or set aside money when an account turns bad.

WHAT'S A STANDARD A/C?

If the borrower pays his dues regularly it is classified as a standard account. The RBI has asked banks to make provisions also for standard loans. Provision on all types of standard loan is 0.40% of the loan amount.

WHAT IS A SUBSTANDARD ASSET?

An asset is sub-standard when it remains as a bad loan for a period less than or equal to 12 months. In such loans, the net worth of the borrower or the market value of the security charged is not enough to ensure entire recovery of the dues. The provision to be set aside for sub-standard loan is 15% of the overdue amount.

WHAT IS A DOUBTFUL ASSET CATEGORY?

When an asset remains in the sub-standard category for 12 months it is classified as doubtful asset. Recovery of the full value of the overdue is highly questionable and mostly improbable.

WHAT IS A LOSS ASSET?

A loss asset is when a bank acknowledges that there is little or no value in retaining the account on its book and ideally, such loans should be written off. The RBI has mandated banks to provide 100% for the outstanding dues.

IS IT POSSIBLE TO UPGRADE AN A/C FROM AN NPA TO STANDARD CATEGORY?

When a borrower pays arrears of interest a interest rate is lowered.nd principal, the account can be upgraded from an NPA category to a standard loan category. Often banks restructure a loan account by giving borrowers more time to repay dues and at times

What is a 'White-label ATM'?

What is a white-label ATM?

Most automated teller machines (ATMs), or machines that dispense cash, are owned by banks. But ones that are owned and operated by non-banking companies are called while-label ATMs (WLAs). They function just the same way as any other bank-run ATM.

Why did the RBI permit them now?

So far, banks have deployed almost 87,000 ATMs across India. Although they are free to put up ATMs anywhere, there is still a huge scope for setting up more ATMs in non-urban and nonmetro cities.

So, the RBI has allowed non-banking companies to deploy white-label ATMs to expand their reach in rural India. However, non-banking companies entering this market will have to maintain a certain ATM ratio between rural and urban India. The RBI is yet to prescribe the ratio.

How does the customer benefit?

As the ATM network expands, more and more people will have easy access to cash as any customer with an ATM card can access white-label ATMs. However, the RBI norm allowing five free ATM transactions will not be applicable at these ATMs.

While the non-banking company won't be allowed to charge a customer directly for the transaction, the costs are expected to be displayed upfront on the screen. It is likely that the bank may recover the transaction charge from the customer separately.

What is the response so far?

As of now, many companies, such as Muthoot Finance and Prizm Payments, have shown interest in setting up these ATMs. It is likely that ATM manufacturers, such as NCR, Diebold and AGS, may also apply for setting up these dispensers themselves. Worldwide, white-label ATMs are in use in Canada and some African and European countrie