TERMINOLOGIES/ CONCEPTS RELATED TO BANKING IN INDIA

Banking terms and concepts constitute widespread terminology across all banking institutions in India. At times, these terms can pose challenges, even for finance and banking experts. However, given the pervasive nature of banking in both business and personal spheres, familiarity with these terms holds significant value.

Presently, numerous banking terms might be unfamiliar to many individuals. Beyond the commonly recognized ones such as ATM, bills of exchange, and various bank account types, there exists a set of terms and abbreviations that remain relatively obscure.

Yet, for practical comprehension and exam readiness, every aspirant in banking and finance is anticipated to grasp and comprehend industry-specific terms. Moreover, the banking awareness segment of banking examinations frequently encompasses numerous banking terminologies. Similarly, during banking interviews, candidates\' knowledge of these terminologies often undergoes assessment.

Consequently, banking terminologies assume pivotal significance across all phases of IBPS PO/Clerk and other banking examinations.

Comprehensive Banking Terms Glossary The following section provides an exhaustive glossary of banking terminologies,in All Alphabets(26) A-Z

Account - This denotes the record of ongoing transactions between two entities, typically banks and customers. Essentially, it represents a nominal interest-bearing account.

ATM (Automated Teller Machine) - These are automated machines facilitating cash dispensing, deposits, balance inquiries, and more.

Annuity - A fixed annual payment made, often for the recipient\'s lifetime.

Assets - Resources owned or controlled by an individual, corporation, or country, expected to yield future benefits.

Bailout - A rescue action undertaken to assist a financially distressed company.

Balance Sheet - A financial statement detailing a company\'s assets, liabilities, and shareholders\' equity at a specific period, serving as a basis for assessing its performance.

Bank Credit - Loans extended by banks to customers through various mechanisms like loan facilities and bill discounting.

Bank Deposits - Opposite to bank credit, it denotes depositing personal savings with banks for diverse purposes, including safety and interest accumulation.

Banknote - A promise note issued by a bank, committing to pay a specified amount upon presentation.

Bank Rate - The interest rate charged by a central bank to commercial banks for loans and advances, often used as a monetary policy tool.

Bankruptcy - A legal process initiated when individuals or entities are unable to repay debts, seeking relief from obligations.

Bridge Loan - Short-term financial assistance provided by banks to alleviate temporary cash shortages.

Bancassurance - The distribution of insurance products through banks as corporate agents, typically entailing service fees charged by banks to insurance companies.

Bouncing of a cheque - A situation wherein an account lacks sufficient funds, rendering cheques non-payable and returned by banks.

Base Rate - The interest rate forming the basis for a bank\'s lending rates, influencing lending and saving rates.

Basis Point - A unit used to denote one-hundredth of a percentage point, commonly applied in indicating finance costs.

Bills of Exchange - Written instruments containing unconditional orders to pay a specified amount, regulated under the Negotiable Instruments Act of 1881.

Call Money - Short-term loans available for a few days at lower interest rates.

Capital Assets - Assets not frequently bought or sold in daily business operations.

Cash - Physical currency represented by banknotes and coins.

Capital Expenditure - Non-recurring expenses incurred in acquiring capital assets.

Cash Cow - Profitable enterprises with limited growth potential.

Cheque - A written instrument used to transfer funds between bank accounts.

Core Banking - A term encompassing services offered by interconnected bank branches.

Core Banking Solutions (CBS) - Networked branches enabling customers to access funds and transactions across branches.

Cash Reserve Ratio (CRR) - The portion of funds banks are required to maintain with the Reserve Bank of India (RBI), influencing available bank funds.

Current Account - A business-focused account with no withdrawal restrictions and no interest paid.

Cash Discount - Reduction offered at the time of payment.

Cash flow - The movement of money into and out of a business during transactions.

Cheap money - Loans or credit available at low interest rates.

Certificate of Deposit - A certificate issued by banks to depositors, specifying deposit length and interest rate.

Collateral Security - Assets pledged by borrowers to lenders, serving as loan security.

Commercial Banks - Financial institutions accepting deposits, offering loans, and basic financial products.

Credit Card - A payment card allowing cardholders to pay merchants based on the promise to repay the card issuer.

Crossing the Cheque - Instructing banks to deposit specified amounts directly into the payee\'s account.

Debit card - Issued by banks, allowing customers to withdraw funds digitally.

Demat Account - A bank-maintained electronic account for share certificates.

Dishonour of Cheque - Non-payment of a cheque by the paying bank, accompanied by a return memo.

E-banking - Digital banking enabling financial transactions through digital mediums.

EFT (Electronic Fund Transfer) - Fund transfers between different accounts using digital methods.

Fiscal deficit - Funds borrowed by the government to meet expenditures.

Finance - Matters concerning money management, creation, and investment.

Flat money - Currency established by government regulation without intrinsic value.

Hot money - Capital moved between economies and markets for short-term profit.

Hypothecation - Pledging collateral to secure a debt.

Idle Money - Uninvested money not earning interest.

Insolvency - Inability to pay debts.

Interest - Payment above the principal amount to lenders or depositors.

Inflation - Rise in price levels due to increased money circulation without corresponding goods increase.

Initial Public Offering (IPO) - First offering of shares to the public by a company.

Kiosk Banking - Banking services offered alongside other products.

Leverage Ratio - A financial ratio assessing a company\'s ability to meet financial losses.

Letter of Credit - A bank-issued guarantee for specified payments.

Liabilities - Debts owed by individuals or companies.

Lien - Right to hold another\'s property until a debt is paid.

Liquid Assets - Assets easily convertible to cash.

Liquidity - Ability to convert investments to cash quickly.

Lease - An agreement allowing use of property or land for a fixed period in exchange for rent.

Market Capitalization - Value derived by multiplying share price and outstanding shares.

Mortgage - Security offered for a loan.

Mutual Fund - Investment scheme pooling funds from multiple investors.

Microfinance - Financial services targeting individuals lacking conventional banking access.

Monetary Policy - Central bank policy governing money, interest rates, and exchange rates.

Non Performing Assets (NPAs) - Loans with delayed repayments.

Near Money - Highly liquid assets convertible to cash.

Negotiable Instruments - Documents ensuring specified payments.

Overdraft - Withdrawing more than the available account balance.

Permanent Account Number (PAN) - Identification number issued by the Income Tax department.

Plastic Money - Card-based payment methods.

Point of Sale (PoS) - Location for card transaction payments.

Prime Lending Rate (PLR) - Interest rate for loans to low-risk customers.

Pass Book - Record book detailing bank transactions.

Repo Rate - Rate at which commercial banks borrow from RBI.

Reverse Repo Rate - Rate at which RBI borrows from banks.

Special Drawing Rights (SDR) - IMF reserve asset.

Teller - Bank staff handling transactions.

Universal Banking - Financial institutions offering varied services.

Virtual Banking - Online-based banking without physical branches.

Wholesale Banking - Focused on institutional clients.

Zero Coupon Bond - Bonds sold at a discount without periodic interest.\"