Banking Awareness Question

Subsidiaries of RBI: Know Banking History, RBI & RBI Subsidiary Banks, Banking Awareness Class-1

Banking Awareness is very important for Bank competitive exams. From banking awareness Questions asked in IBPS PO Mains, SBI PO Mains and Other Banking Examinations. Here we have discussed the History of Banking, RBI and Subsidiary of RBI.

Subsidiaries of RBI:-

The Fully Owned subsidiaries of RBI are as follows:-

1. Deposit Insurance And Credit Guarantee Corporation (DICGC)

  • DICGC is one of the wholly-owned subsidiaries of RBI.
  • It was established on 15 July 1978 under Deposit Insurance and Credit
    Guarantee Corporation Act, 1961 for the purpose of providing insurance of
    deposits and guaranteeing of credit facilities.
  • Before DICGC, there were two corporations named Deposit Insurance Corporation (DIC) and Credit Guarantee Corporation of India Ltd. (CGCI) which were merged to form DICGC with a view to integrating the functions of both DIC and CGCI.
  • Banks Insured by DICGC:-

==> Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.

==> Cooperative Banks: Cooperative Banks which are defined in section 2(gg) of the DICGC Act are covered by the Deposit Insurance Scheme.

==> At present all co-operative banks other than those from the States of Meghalaya, and the Union Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli are covered under the deposit insurance system of DICGC.

==> All State, Central and Primary co-operative banks

==> Primary cooperative societies are not insured by the DICGC.

  • What does the DICGC insure?

In the event of a bank failure, DICGC protects bank deposits that are payable in India.
The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except
the following types of deposits.
(i)  Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii) Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State co-operative bank;
(v) Any amount due on account of any deposit received outside India
(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of the Reserve Bank of India.

  • What is the maximum deposit amount insured by the DICGC?

Each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One
Lakh) for both principal and interest amount held by him in the same capacity and
the same right as on the date of liquidation/cancellation of bank’s license or the date on
which the scheme of amalgamation/merger/reconstruction comes into force.

  • Are deposits in different banks separately insured?

Yes. If you have deposits with more than one bank, the deposit insurance coverage limit is applied separately to the deposits in each bank.

  • Can the bank deduct the amount of dues payable by the depositor?

Yes. Banks have the right to set off their dues from the amount of deposits. The
deposit insurance is available after netting of such dues.

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  • Who pays the cost of deposit insurance?

Deposit insurance premium is borne entirely by the insured bank.

  • When is the DICGC liable to pay?

==> If a bank goes into liquidation:

==> If a bank is reconstructed or amalgamated / merged with another bank.

  • Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) was established by Reserve Bank of India (RBI) as its wholly owned subsidiary on 3rd February 1995 with a view to augmenting the production of bank notes in India to enable the RBI to bridge the gap between the supply and demand for bank notes in the country.

The BRBNMPL has been registered as a Private Limited Company under the Companies Act 1956.
BRBNMPL headquarter is in Bengalaru.
The company manages 2 Presses
Mysore in Karnataka
Salboni in West Bengal
The present capacity for both the presses is 16 billion note pieces per year on a 2-shift basis.
“To emerge as a Global Leader in pursuit of excellence providing the best in Design, printing, services and supply of banknotes and other security documents.”

Shri B. P. Kanungo is the chairman of the BRBNMPL.

National Housing Bank (NHB)

  • NHB has been established with an objective to operate as a principal agency to
    promote housing finance institutions both at local and regional levels and to provide
    financial and other support incidental to such institutions and for matters connected
  • NHB is an apex financial institution for housing
  • NHB regulates the housing finance system of the country, extends refinance to different primary lenders and lends directly in respect of projects undertaken by public housing agencies for housing construction and development of housing-related infrastructure.
  • National Housing Bank is a statutory organization set up on July 9, 1988 under    the National Housing Bank Act, 1987. NHB is wholly owned by Reserve Bank of India, which contributed the entire paid-up capital.
  • NHB does not deal directly with public.
  • NHB grants direct loans to Public Agencies directly or in partnership with private developers under the PPP model to the development of housing projects as per the Schemes/Guidelines of NHB.
  • NHB does not grant any loan directly to individual
  • The Head Office of NHB is at New Delhi
  • MD and CEO: Shri Sriram Kalyanaraman

What is a Housing Finance Company (HFC)?

A Housing Finance Company is a company registered under the Companies Act, 1956 (1 of 1956) which primarily transacts or has as one of its principal objects, the transacting of the business of providing finance for housing, whether directly or indirectly.

What are the requirements for commencing housing finance business by an HFC under the NHB Act?

For commencing the housing finance business, an HFC is required to have the      following in addition to the requirements under the Companies Act, 1956:
a. Certificate of registration from NHB
b. Minimum net owned fund of Rs. 1000 lakhs ( w.e.f. 01.04.2014)