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Banking Terms And Definitions In India Pdf

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Government oversight : In the past, the Government has nationalised a number of major commercial banks. While the Government has not made any moves to nationalise the banks any further, the Government has the power to acquire undertakings of an Indian bank in certain situations, including for breach of applicable regulations. The Government has also been and is in the process of merging various public sector banks to strengthen the balance sheets of the banks and also has plans to reduce Government stakes in the public sector banks as part of its disinvestment plans.

The data are collected in partnership with Gallup, Inc. The edition includes updated indicators on access to and use of formal and informal financial services. And it adds new data on the use of financial technology fintech , including the use of mobile phones and the internet to conduct financial transactions.

Basic Banking Terms and Definitions PDF Free Download

Aspirants must read the below at a regular basis to get a good score in your competitive exams. Most of the questions in exam comes from below bank terminology. Bank rate is the rate at which central bank of the country e. RBI in India allows finance to commercial banks.

Bank Rate is a tool, which central bank uses for short-term purposes. Basis Points It is the increase in interest rates in percentage terms. For instance, if the interest rate increases by 50 basis points bsp , then it means that interest rate has been increased by 0. One percentage point is broken down into basis points. SLR is the amount a commercial banks needs to maintain in the form of cash, or gold, or govt. SLR is used to control inflation and propel growth.

Through SLR rate, the money supply in the system can be controlled effectively. Repo Rate is the interest rate at which commercial banks borrows rupees from RBI short-term period 1 to 90 days. A reduction in the repo rate will help banks to get money at cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive. Reverse Repo rate is the rate at which RBI borrows money from commercial banks.

Banks are always happy to lend money to RBI since their money is in good hands with a good interest. An increase in reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. Reverse Repo Rate is always 1 percent less than the Repo Rate.

The transfer is not direct and RBI acts as the service provider to transfer the money from one account to another. You can transfer any amount through NEFT, even a rupee. The transactions are settled as soon as they are processed. Liquidity Adjustment Facility is a monetary policy tool which allows banks to borrow money through repurchase agreements. LAF is used to aid banks in adjusting the day to day mismatches in liquidity.

LAF consists of repo and reverse repo operations. MSF is always 1 percent more than the Repo Rate. This type of bank account exists in India for citizens to trade in stocks or debenture market i. It is same as saving account SA as SA contains saved money whereas a demat account contains saved stock.

RAFA Ratio indicates that what amount of deposit bank has in the form of Recurring and fixed deposits. It is a demand deposit account. CASA Ratio denotes the ratio of deposits maintained in a bank in the form of current and saving account to the total deposits of all accounts.

It is the interest rate at which banks can borrow funds in a marketable size from other banks in Mumbai Indian Interbank market.

Capital to risk weighted assets ratio is arrived at by dividing the capital of the bank with aggregated risk weighted assets for credit risk, market risk and operational risk. The value of SDR is based on the portfolio of widely used countries and they are maintained as accounting entries and not as hard currency or physical assets like Gold. Publicly traded long term debt securities issued by corporations and governments, whereby the issuer agrees to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal maturity.

An asset loan , including a leased asset, become non performing when it stops generating income for the bank. Once the borrower has failed to make interest or principle payments for 90 days, the loan is considered to be non-performing asset.

Retail banking is a kind of banking where direct dealing with retailer customer is take place. It is also called consumer or personal banking. This is the visible face of banking to the public. As the name suggests, UPI integrates the entire payment systems in India. Primary source of all kind payment is mobile device. Read More. Green Banking defines as promoting environmentally friendly practices and reduces the carbon footprints from banking operations.

If every household were able to switch to paperless bank billing, this would save an estimated 16,, trees per year or about a 46, acre forest, , tonnes of CO 2 a year, and , tonnes of air pollution per year and gain almost 2,, tonnes of oxygen per years.

It aims to improve the banking and its operations, technologies for social as well as environmental factors for protecting environment. Whenever there is less loan demand, the bank give their excess fund with central bank i. RBI by which they receive an interest. Negative Interest Rate Policy NIRP means the central bank charges negative interest on deposits made by commercial banks with central bank.

On other hand, commercial bank will also do the same with common people. In end, the effect is that the people will have to pay the negative interest money to bank to hold their cash in account. A money market is an organised market which provides short-term i. Example — certificate of deposit, commercial paper, repurchase agreement etc. Money market is inter banking lending occurs.

Money market is also a kind of a saving account but return is more in money market account and minimum account balance requirement for money market account is more than saving account. Capital Market are those institution for which companies raise the money for long-term i.

Example — stocks, bonds. More risk and return exists in capital market than money market. Capital market has two types a Primary Market and b Secondary Market. In primary market, new shares and bonds have been issued. Direct transaction occurs between company and investors. When we invest money in primary market, it directly go to company. Price of share is declared and settled in primary market by company.

In secondary market, trading has been done on already issued shares and bonds. Direct transaction occurs between investors, no company involves in these transactions.

Share price in secondary market depends on demand and supply. Money laundering is the process of converting the illegal money obtained from various other unlawful sources to showcase it as legitimated money.

Various sources of illegal money are bribe, smuggling, tax evasion etc. Each public and private sector bank keep certain amount of percentage from their total deposits with RBI in the form of Net demand and Time Liability. Each bank has to pay the amount to RBI on every 15th days. Rupee vs Dollar. It is a small POS type machine and has an additional feature of Biometric scanning. These machine can be connected to banking network through mobile GPRS to perform banking operation.

Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than local currency. These bonds are helpful for raising Indian Rupees from International investors for infrastructure development in India.

Banking Ombudsman actually is a senior official appointed by the RBI to redress customer complaints against pitfalls in the stipulated banking service covered by the Banking Ombudsman Scheme modifications are made in Legal tender is a medium of payment recognized by a legal system to be valid for meeting a financial obligation.

Coin and paper currency are common form of legal tender in many countries. According to provision of coinage Act , coins and currency notes Re. Issue of 1,2, and 3 paisa coins has discontinuous w. Sep 16, Personal cheques, credit cards and similar non-cash methods of payment are not usually legal tender. Intangible assets are non-physical assets that are nonetheless essential to a company, such as patents, trademarks, and copyrights.

The goal in amortizing an asset is to match the expense of acquiring it with the revenue it generates. The purpose of depreciation is to match the expense of obtaining an asset to the income it helps a company earn. Depreciation is used for tangible assets , which are physical assets such as manufacturing equipment, business vehicles, and computers. Capital expense is either amortized or depreciated depending upon the type of assets acquired through the expense.

Currency Chest is a storage place where the RBI kept all the excess money of banks under its custody. Whenever RBI prints new currency notes, these currency notes goes firstly to currency chest and then currency chest deliver these new currency notes to banks. In other words, currency chest is a depository of RBI.

Bankruptcy is a legal term for when a person or business cannot repay their outstanding debts. In this partnership, bank staff and tellers become the point of sale and point of contact for the customer. This was originated in Europe in the s and was successful.

Bancassurance business model is a globally accepted profitable business. Main aim of this Clean Note Policy is to provide good quality currency notes and coins to the citizens of our country. A bill of exchange is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.

This bill is signed by the creditor and accepted by a debtor. The customer is no more the customer of a Branch. It is also called Credit Squeeze or Credit Crisis. The balance of payments is a summary of all monetary transactions between a country and rest of the world.

Bank Guarantee : Uses, Eligibility & Process, Advantages

Home Curation Policy Privacy Policy. Bill of Exchange — an order in writing from one person to a bank or to another person, to pay on -demand or at a given date, a certain sum to the person named in the bill. Missing — what is not there but should be. They are machines that dispense cash, receive cash, accept cheques, and give balance details and mini statements to the customers through Computer network, It is the distribution of insurance products and the insurance policies of insurance companies by banks as corporate agents through their branches. List of Important Banking Terms — Download in PDF Banking terms and concepts are many and can sometimes be difficult to figure out, even for the industry professionals. Sales drive — sales campaign; special effort. However, since banking is a significant part of our business and personal life, it is useful for consumers to learn some common banking terms.

A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords. Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but in many ways functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world. In the history of banking , a number of banking dynasties — notably, the Medicis , the Fuggers , the Welsers , the Berenbergs , and the Rothschilds — have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena founded in , while the oldest existing merchant bank is Berenberg Bank founded in

Basic Banking Terminology & Concepts : Learn Now

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The contract governing your open-end credit account, it provides information on changes that may occur to the account. The payment history of an account over a specific period of time, including the number of times the account was past due or over limit. Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank.

Hey I am Ramandeep Singh. Do you want me to help you? Login Sign Up. ATMs allows customers to complete some basic transactions, without the help of teller.

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Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, Description: In this case, the service provider pays the tax and recovers it from the customer. Service Tax was earlier levied on a specified list of services, but in th.

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, Description: In this case, the service provider pays the tax and recovers it from the customer. Service Tax was earlier levied on a specified list of services, but in th.

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