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An ACH is a computer-based electronic network that allows participating financial institutions to execute transactions, mainly low-value domestic transfers. What does C represent in the acronym ACH?
  • a)
    Computer
  • b)
    Clearing
  • c)
    Clearance
  • d)
    Credit
  • e)
    Cash
Correct answer is option 'B'. Can you explain this answer?
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An ACH is a computer-based electronic network that allows participatin...
An automated clearing house (ACH) is a computer-based electronic network that allows participating financial institutions to execute transactions, mainly low-value domestic transfers.
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Direction: Non-Banking Financial Companies (NBFCs) are financial institutions that provide banking services without holding a banking license. They operate in various segments such as consumer finance, vehicle finance, housing finance, and microfinance, among others. Banks provide finance to NBFCs in the form of term loans, working capital loans, and credit lines. The finance is typically used by NBFCs to fund their lending activities, purchase assets, and other operational expenses. Banks also provide credit enhancement facilities such as guarantees and letters of credit to support NBFCs in raising funds from the market. The Reserve Bank of India (RBI) regulates the lending activities of banks to NBFCs. The RBI has mandated that banks should classify their lending to NBFCs as per their risk assessment and ensure that the exposure to individual NBFCs does not exceed the prescribed limits.Q. Which of the following institutions is not included in the definition of NBFC?

Direction: Read the passage carefully and select the best answer to each question out of the given five alternatives.Banks will conduct special clearing operations for annual closure of government accounts on March 31, which is the last day of the current fiscal year, the RBI has said. The Reserve Bank has issued directions to the banks for smooth clearing operation and asked them to mandatorily participate in it. With regard to annual closing of accounts related transactions of the central and state governments, special measures are put in place for 2020-21, the RBI has instructed all the member banks to maintain sufficient balance in their clearing settlement account. Normal clearing timings as applicable to any working Wednesday shall be followed on March 31, 2021, the RBI said in a notification addressed to the member banks, urban and state cooperative banks, payments banks, small finance banks as well as the NPCI. To facilitate accounting of all the government transactions for the current financial year 2020-21 by March 31, 2021, it has been decided to conduct special clearing exclusively for government cheques across the three CTS grids on March 31, 2021, the RBI said.Under this, presentation clearing will take place between 1700 to 1730 hrs and return clearing will take place between 1900 and 1930 hrs at the three CTS (cheque truncation system) grids located in New Delhi, Chennai and Mumbai. “It is mandatory for all banks to participate in the special clearing operations on March 31, 2021. All the member banks under the respective CTS grids are required to keep their inward clearing processing infrastructure open during the special clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the special clearing,” said the regulator. Besides, it has asked the banks under the respective CTS grids to adhere to the instructions issued to them by the President of the respective CTS grid. Under the CTS system, there is no need to present a cheque physically for clearance, instead an electronic image is being transmitted to the paying branch through the clearing house, with the relevant data. This eliminates the cost of movement of the physical cheques and reduces time for collection and clearance of cheques. All government transactions done by agency banks for 2020-21 must be accounted for within the same financial year, the RBI said. The central bank said all agency banks should keep their designated branches open for over the counter transactions related to government transactions up to the normal working hours on March 31, 2021. “Transactions through National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) System will continue up to 2400 hours as hitherto on March 31, 2021. “Special clearing will be conducted for collection of government cheques on March 31, 2021 for which the Department of Payment and Settlement Systems (DPSS), RBI will issue necessary instructions,” it said. With regard to reporting of central and state government transactions to RBI, including uploading of GST/e-receipts luggage files, the reporting window of March 31, 2021 will be extended and kept open till 1200 hours on April 1, 2021, the RBI said.Choose the antonym of the word 'Exclusively'.

Direction: Read the passage carefully and select the best answer to each question out of the given five alternatives.Banks will conduct special clearing operations for annual closure of government accounts on March 31, which is the last day of the current fiscal year, the RBI has said. The Reserve Bank has issued directions to the banks for smooth clearing operation and asked them to mandatorily participate in it. With regard to annual closing of accounts related transactions of the central and state governments, special measures are put in place for 2020-21, the RBI has instructed all the member banks to maintain sufficient balance in their clearing settlement account. Normal clearing timings as applicable to any working Wednesday shall be followed on March 31, 2021, the RBI said in a notification addressed to the member banks, urban and state cooperative banks, payments banks, small finance banks as well as the NPCI. To facilitate accounting of all the government transactions for the current financial year 2020-21 by March 31, 2021, it has been decided to conduct special clearing exclusively for government cheques across the three CTS grids on March 31, 2021, the RBI said.Under this, presentation clearing will take place between 1700 to 1730 hrs and return clearing will take place between 1900 and 1930 hrs at the three CTS (cheque truncation system) grids located in New Delhi, Chennai and Mumbai. “It is mandatory for all banks to participate in the special clearing operations on March 31, 2021. All the member banks under the respective CTS grids are required to keep their inward clearing processing infrastructure open during the special clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the special clearing,” said the regulator. Besides, it has asked the banks under the respective CTS grids to adhere to the instructions issued to them by the President of the respective CTS grid. Under the CTS system, there is no need to present a cheque physically for clearance, instead an electronic image is being transmitted to the paying branch through the clearing house, with the relevant data. This eliminates the cost of movement of the physical cheques and reduces time for collection and clearance of cheques. All government transactions done by agency banks for 2020-21 must be accounted for within the same financial year, the RBI said. The central bank said all agency banks should keep their designated branches open for over the counter transactions related to government transactions up to the normal working hours on March 31, 2021. “Transactions through National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) System will continue up to 2400 hours as hitherto on March 31, 2021. “Special clearing will be conducted for collection of government cheques on March 31, 2021 for which the Department of Payment and Settlement Systems (DPSS), RBI will issue necessary instructions,” it said. With regard to reporting of central and state government transactions to RBI, including uploading of GST/e-receipts luggage files, the reporting window of March 31, 2021 will be extended and kept open till 1200 hours on April 1, 2021, the RBI said.What is being transmitted under the CTS?

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An ACH is a computer-based electronic network that allows participating financial institutions to execute transactions, mainly low-value domestic transfers. What does C represent in the acronym ACH?a)Computerb)Clearingc)Clearanced)Credite)CashCorrect answer is option 'B'. Can you explain this answer?
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