List of Selected Abbreviations for banking Exams

List of Selected Abbreviations for banking Exams

AACS As Applicable to Co-operative Societies

ABEP Annual Branch Expansion Programme

ADF Automated Data Flow

ADR American Depository Receipt

AEs Advanced Economies

AFA Additional Factor of Authentication

AFCs Asset Finance Companies

AFI Annual Financial Inspection

PRE-2005 NOTES

1. What are the pre-2005 series banknotes?

The RBI issued Mahatma Gandhi series (MG series) 2005 banknotes in the denomination of ` 10, ` 20, ` 50, ` 100, ` 500 and ` 1000. These notes contain some additional / new security features as compared to the 1996 MG series. All banknotes issued before the 2005 MG series are called as pre-2005 series banknotes.
2. How can one distinguish the pre-2005 series banknotes? Apart from the additional security features, the 2005 MG series banknotes have the year of printing on the reverse of the notes in the lower middle portion. Banknotes printed before 2005 do not have the year of printing on the reverse side and hence can be easily distinguished.

3. Why has RBI decided to withdraw pre-2005 series banknotes?

Reserve Bank of India decided to withdraw from circulation all banknotes issued prior to 2005 as they have fewer security features as compared to banknotes printed after 2005. The withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time. The RBI has already been withdrawing these banknotes in a routine manner through banks. It is estimated that the volume of such banknotes (pre-2005) in circulation is not significant enough to impact the general public in a large way and the members of public may exchange the pre-2005 series banknotes at bank branches at their convenience.

4. Do the pre-2005 series banknotes cease to be legal tender?

The notes issued before 2005 shall continue to be legal tender. The notes are only being withdrawn from circulation and this withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time.
5. Can the pre-2005 series banknotes be used for normal transactions? Members of the public can continue to freely use these notes for their transactions and can unhesitatingly receive these notes in payment, as all such notes continue to remain legal tender.

6. Is there any time limit for exchanging these notes?

These notes can be freely exchanged at any bank branch till January 1, 2015. The procedure to be followed after January 1, 2015, shall be communicated by RBI in due course.

7. How is RBI ensuring that these notes are withdrawn from circulation?

Banks have been advised to stop re-issue of the pre-2005 series notes over the counters/through ATMs and they have been instructed to forward them to the Reserve Bank of India.

8. Is there any restriction on the number of pieces that can be exchanged?

No. There is no such restriction. Banks have been advised to freely exchange these notes till January 1, 2015.

9. Is it necessary to be a customer of the bank to exchange the pre-2005 series notes from its branches?

No. Banks have been advised to freely provide this exchange facility to all members of public, whether customer or non-customer.

10. Is it necessary to get cash in exchange or the amount can be credited in one’s account?

It is not necessary to get cash in exchange for the pre-2005 notes. If a person desires, he can get the amount credited in his bank account.

11. Is there any fee to be paid for the exchange facility?

No. The exchange facility is to be provided free of cost by all bank branches.

CHEQUE TRUNCATION SYSTEM

1. What is Cheque Truncation?
Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point with the presenting bank en-route to the drawee bank branch. In its place an electronic image of the cheque is transmitted to the drawee branch by the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical instruments across branches, other than in exceptional circumstances for clearing purposes. This effectively eliminates the associated cost of movement of the physical cheques, reduces the time required for their collection and brings elegance to the entire activity of cheque processing.
2. Why Cheque Truncation in India?
As explained above, Cheque Truncation speeds up the process of collection of cheques resulting in better service to customers, reduces the scope for clearing-related frauds or loss of instruments in transit, lowers the cost of collection of cheques, and removes reconciliation-related and logistics-related problems, thus benefitting the system as a whole. With the other major products being offered in the form of RTGS and NEFT, the Reserve Bank has created the capability to enable inter-bank and customer payments online and in near-real time. However, as cheques are still the prominent mode of payments in the country and Reserve Bank of India has decided to focus on improving the efficiency of the cheque clearing cycle, offering Cheque Truncation System (CTS) as an alternative. As highlighted earlier, CTS is a more secure system vis-a-vis the exchange of physical documents.
In addition to operational efficiency, CTS offers several benefits to banks and customers, including human resource rationalisation, cost effectiveness, business process re-engineering, better service, adoption of latest technology, etc. CTS, thus, has emerged as an important efficiency enhancement initiative undertaken by Reserve Bank in the Payments Systems area.