QA Series No 50 - General Part 1

 

The Banking Tutor

Question Answer Series 2025

S No 50                                                                  29-08-2025

General – Part 2

15. What is a Brown Label ATM ? 

A Brown Label ATM is an automated teller machine where a bank outsources the hardware and maintenance to a third-party service provider but uses its own branding and manages the cash. This model is a hybrid between a bank-owned ATM and a white label ATM. 

16. What is a White Label ATM ? 

A White Label ATM (WLA) is an automated teller machine set up, owned, and operated by a non-banking entity rather than a bank itself. These ATMs allow customers of any bank to perform basic transactions like cash withdrawals, and are common in rural and semi-urban areas to increase ATM access and financial inclusion. 

17. Which is the First Company to open White Label ATM? 

Tata Communications Payment Solutions Limited is the first company to get RBI’s permission to open White label ATMs. They started their chain under brand name “Indicash”. 

18. What is Inflation? 

Inflation refers to a broad rise in the prices of goods and services across the economy over time, eroding purchasing power for both consumers and businesses. 

19. What is Deflation? 

Deflation is a general decline in prices for goods and services,  associated with a reduction  in the supply of money and credit in the economy, but prices can also fall due to increased productivity and technological improvements. . During deflation, the purchasing power of currency rises over time. 

20. What is Disinflation? 

Disinflation is a temporary slowing of the pace of price inflation. It is used to describe instances when the inflation rate has reduced marginally over the short term. It should not be confused with deflation. 

21. What is the difference between Deflation and Disinflation? 

Inflation and deflation  refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation. 

22. What is Reflation? 

Reflation is the act of stimulating the economy by increasing the money supply or by reducing taxes, seeking to bring the economy (specifically price level) back up to the long-term trend. It is the opposite of disinflation, which seeks to return the economy back down to the long-term trend. 

23. What is the difference between Inflation and Reflation? 

Reflation, which can be considered a form of inflation (increase in the price level), is different from inflation (narrowly speaking) in that “ inflation” is inflation above the long-term trend line, while reflation is a recovery of the price level when it has fallen below the trend line. 

24. What is Re-inflation ? 

Re-inflation - Reflation is the term used in the context of  Finance, whereas the term Re-inflation is  used in other Sectors such as Medicine. In Finance the term Reflation is only used and not Re-inflation. 

25. What is the objective of Monetary Policy? 

Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by Reserve Bank of India. 

26. What is Fiscal Policy? 

Fiscal policy is a collective term for the taxing and spending actions of governments. 

27. What is Capitalisation of Interest? 

 During Holiday / Moratorium Period neither instalment nor interest is to be paid by the borrower (Holiday period for both principal and interest). The total interest accrued during the entire holiday period will be charged to the account only on completion of the holiday period by crediting to 'interest accrued' and fresh schedule is drawn for the outstanding balance for the term of the loan. This is called as 'Capitalization' of interest.

28. What is  Post Maturity Instalment Stage? 

If the loan is not cleared before the due date, on maturity, the loan account slips in to PMI stage and the account will be governed by the rates/rules defined under this stage for the given schedule. 

29. What is GDP? 

Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health. 

GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate. 

30. What is GNP? 

The Gross National Product (GNP) is a measurement of the overall production of persons or corporations native to a country, including those based abroad. GNP excludes domestic production by foreigners. 

31. What is GNI? 

Gross National Income (GNI) is another measure of economic growth. It is the sum of all income earned by citizens or nationals of a country (regardless of whether or not the underlying economic activity takes place domestically or abroad). 

32. What is Positive Pay System? 

Positive Pay System (PPS)  involves re-confirming of key details of the cheque by drawer to the Bank, which would be cross-checked with the presented cheque at the time of payment processing. 

33. What is a Recession in the context of economy? 

A Recession is a widespread economic decline that lasts for several months. A Recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year. In a recession, Gross Domestic Product  contracts for at least two quarters. In a recession, GDP growth will slow for several quarters before it turns negative. 

34. What is a Depression in the context of economy? 

A Depression  a more severe downturn that lasts for years. Depression is a prolonged period of economic recession marked by a significant decline in income and employment. A common rule of thumb for depression is a negative GDP of 10% of more, for more than 3 years. 

35. What is a Slowdown in the context of economy? 

A slowdown means that the pace of the GDP growth has decreased. During slowdown, the GDP growth is still positive but the rate of growth has decreased. 

36. What is a Greenfield Investment Strategy ? 

A Greenfield Investment Strategy (GIS) (or Green Field project) is where the entire project has to start from scratch. And everything from planning to implementation is new.

37. What is a Brown Field Investment? 

A brownfield (or “brown-field") investment is when a company purchases or leases existing production facilities to launch a new production activity. This is one strategy used in foreign-direct investment. 

38. What is Amortisation ? 

Amortization is a method of spreading the cost of an intangible asset over a specific period of time, which is usually the course of its useful life. 

39. What are Intangible Assets? 

Intangible assets are non-physical assets that are nonetheless essential to a company, such as patents, trademarks, and copyrights. 

40. What is the difference between Depreciation and Amortization? 

Difference between amortization and depreciation is that amortization is used for intangible assets, while depreciation is used for tangible assets. 

41. What is the difference between Saving and Savings? 

“Saving” is income not spent, or deferred  consumption.  More broadly, it refers to any income not used for immediate consumption. Saving also involves reducing  expenditures. The Book costs Rs 15/- at the shop in my colony, but only  Rs 10/- at  the shop in town, so I will make a saving of  Rs 5/- if I buy it from the one in town! 

“Savings" - the money that you have accumulated over time.The difference between saving and savings is that saving is a reduction in cost or expenditure while savings is that which has been saved, particularly money that has been set aside for the future.  

42. What is FITL ? 

In debt restructuring the interest portion is segregated from the total amount. A separate term loan account is created known as Funded Interest Term Loan (FITL). The working capital portion is earmarked as Working Capital Term Loan. According to repayment capacity fresh repayment schedule is made. Usually FITL is made interest free, so that interest is not compounded and borrower gets some relief. 

43. What is WCTL? 

WCTL (Working Capital Term Loan) - Where at the time of renewal it is observed that the actual bank  borrowings are in excess of the Maximum Permissible Bank Finance, such excess should be converted into the Working Capital Term Loan (WCTL). 

Since WCTL is considered only as a component of the limit against chargeable current assets, no modification of charge is necessary nor a resolution passed in the case of corporate borrowers. 

44. What is WCDL? 

WCDL (Working Capital Demand Loan) - In case the liability in OCC is over and above Drawing Power, such irregular portion will be kept separately, to facilitate operations in the account. Such irregular portion of the liability will be treated as WCDL which is to be repaid in instalments over a period. 

45.  What is the difference between Dissolution of Partnership Firm and Dissolution of Partnership? 

The key difference is that dissolution of a partnership refers to a change in the relationship among the partners (e.g., a partner's death or retirement) but the business can continue in a reconstituted form, whereas dissolution of a firm means the complete termination of the business and all partner relationships, leading to the winding up and closure of the firm. The latter involves the cessation of the business and distribution of assets, while the former may result in a new partnership agreement with the remaining partners. 

46. What is the difference between a Condition and Warranty ? 

If someone breaches a condition, the contract may be terminated. If someone breaches a warranty, the other party can claim damages for the breach.  

47. What is the difference between Insurance and Assurance ? 

With insurance, the risk coverage is offered for an anticipated event. On the other hand, assurance offers risk coverage for events whose happening is certain and unquestionable. 

48. What is the difference between Discount and Rebate? 

A discount is an immediate reduction in price offered at the time of purchase, while a rebate is a partial refund issued after the purchase, requiring the customer to submit a claim to receive the money back. Discounts offer immediate gratification, while rebates provide a delayed financial benefit, often with conditions attached.

Sekhar Pariti

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