The government on 10TH Nov. surprised bond dealers and economists alike by raising Rs 10,000
crore from the market through cash management bills (CMBs), a rarely
used instrument that it resorts to only when the exchequer faces a
short-term liquidity mismatch.
Bond dealers warned that given that the exchequer has a cash shortage, if the government's expenses are not controlled at this stage or divestments don't pick up pace, there could be slippages leading to a higher deficit figure than the budgeted 4.1%. However, economists said there is leeway for the government to control expenditure and generate revenues for the exchequer.
Under the Ways and Means Advance (WMA) facility of the Reserve Bank of India (RBI), the government can borrow up to Rs 20,000 crore till March 2015 to meet such short-term frictional cash shortfall at the repo rate, currently at 8%. If the government borrows anything above that limit, it will have to pay an interest of two percentage points above the repo rate - 10% given the current repo rate. However, if the government mobilizes funds through CMB, it usually pays a lower rate of interest. In Monday's 42-day CMB auction, it paid the rate of 8.25% per annum, savings of 1.75 percentage points for the exchequer.
Interview Team,
mahendra Educational Pvt. Ltd.
Bond dealers warned that given that the exchequer has a cash shortage, if the government's expenses are not controlled at this stage or divestments don't pick up pace, there could be slippages leading to a higher deficit figure than the budgeted 4.1%. However, economists said there is leeway for the government to control expenditure and generate revenues for the exchequer.
Under the Ways and Means Advance (WMA) facility of the Reserve Bank of India (RBI), the government can borrow up to Rs 20,000 crore till March 2015 to meet such short-term frictional cash shortfall at the repo rate, currently at 8%. If the government borrows anything above that limit, it will have to pay an interest of two percentage points above the repo rate - 10% given the current repo rate. However, if the government mobilizes funds through CMB, it usually pays a lower rate of interest. In Monday's 42-day CMB auction, it paid the rate of 8.25% per annum, savings of 1.75 percentage points for the exchequer.
Interview Team,
mahendra Educational Pvt. Ltd.
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General Awareness (Quiz)
1. As estimated in the annual report of the United Nation Economic and Social Commission for Asia and the Pacific
(ESCAP), the Indian economy will grow at what per cent in the current fiscal?
1) 5.1 per cent 2) 5.5 per cent 3) 5.9 per cent 4) 6.1 per cent 5) None of these
2. The RBI relaxed KYC norms for opening bank accounts recently. Which of the following is NOT correct in this regard?
1) It has asked banks to allow self-certified copy of the document by mail, or post for opening an account.
2) Banks have not to seek fresh documents, if a KYC compliant customer desires to open another account in the bank.
3) If the customers are unable to comply within a reasonable period of time, partial freezing may be introduced for KYC
non-compliant customers.
4) Under partial freezing, only debits would be allowed in such accounts, but credits would not be allowed.
5) None of these
3. Ryder Cup is associated with which of the following games?
1) Golf 2) Squash 3) Billiards 4) Badminton 5) None of these
4. A new mission named ‘Resolute Support’ focusing on training and supporting the local army and police has been
initiated in which of the following countries recently?
1) Iraq 2) Syria 3) Pakistan 4) Afghanistan 5) None of these
5. Who among the following has been sworn in as the new president of Afghanistan in the country’s first democratic
transfer of power since the ouster of Taliban from power?
1) Abdullah Abdullah 2) Ashraf Ghani Ahmadzai 3) Hamid Karzai
4) Abdul Rashid Dostum 5) None of these
6. The RBI announced it bi-monthly policy review on 30th Sep. Which of the following is NOT matched correctly as per the
latest announcement?
1) The short-term lending rate (repo) – 8 per cent
2) Cash Reserve Ratio (CRR) – 4 per cent
3) Statutory Liquidity Ratio (SLR) – 22.5 per cent
4) The projected GDP growth rate in 2015-16 fiscal – 6.3 per cent
5) None of these
For Answers and More Visit: http://competitionstudies.blogspot.in/2015/06/general-awareness-quiz.html
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