Banking Terminology

Banking Terminology

 

General awareness section of banking exams (SBI,RBI etc.) consists of atleast 2-3 questions on banking terminology. Thus,in this article we have compiled some important terms for your preparation.

A

ADR – American Depository Receipt

AGM – Annual General Meeting

AIRCSC – All India Rural Credit Survey Committee

AFS – Available For Sale

ASSOCHAM – Associated Chambers of Commerce and Industry of India

ATM – Automated Teller Machine

 

B

BIS – Bank for International Settlements

BoP – Balance of Payments

 

C

CAD – Capital Account Deficit

CAG – Controller and Auditor General of India

CAMELS– Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Systems & Controls

CBS – Consolidated Banking Statistics

CC – Cash Credit

CD – Certificate of Deposit

CF – Company Finance

CII – Confederation of Indian Industries

CP – Commercial Paper

CPI – Consumer Price Index

CR – Capital Receipts

CRR – Cash Reserve Ratio

CSIR – Council of Scientific and Industrial Research

CSO – Central Statistical Organisation

 

D

DBOD – Department of Banking Operations and Development

DBS – Department of Banking Supervision, RBI

DCA – Department of Company Affairs,

DCCB – District Central Cooperative Bank

DCM – Department of Currency Management, RBI

DD – Demand Draft

DDS – Data Dissemination Standards

DICGC – Deposit Insurance and Credit Guarantee Corporation of India

 

E

ECGC – Export Credit and Guarantee Corporation

ECS – Electronic Clearing Scheme

EEA – Exchange Equalization Account

EPF – Employees Provident Fund

 

F

FDI – Foreign Direct Investment

FEMA – Foreign Exchange Management Act

FICCI – Federation of Indian Chambers of Commerce and Industry

FII – Foreign Institutional Investor

FPI – Foreign Portfolio Investment

 

G

GDP – Gross Domestic Product

GDR – Global Depository Receipt

GFD – Gross Fiscal Deficit

GIC – General Insurance Corporation

GPD – Gross Primary Deficit

 

H

HDFC – Housing Development Finance Corporation

HFT – Held For Trading

 

I

IBS – International Banking Statistics

ICAR – Indian Council of Agricultural Research

ICICI – Industrial Credit and Investment Corporation of India

ICMR – Indian Council of Medical Research

IDBI – Industrial Development Bank of India

IFC – International Finance Corporation

IFCI – Industrial Finance Corporation of India

IIP – Index of Industrial Production

IMF – International Monetary Fund

IRBI – Industrial Reconstruction Bank of India

ISDA – International Swaps and Derivative Association

ISIC – International Standard Industrial Classification

ISO – International Standards Organization

 

L

LBS – Locational Banking Statistics

LERMS – Liberalised Exchange Rate Management System

LIC – Life Insurance Corporation of India

 

M

MCA – Ministry of Company Affairs

MIS – Management Information System

MMSE – Minimum Mean Squared Errors

 

N

NABARD – National Bank for Agriculture and Rural Development

NASSCOM – National Association of Software and Services Companies

NBC – Non-Banking Companies

NBFC – Non Banking Financial Companies

NEER – Nominal Effective Exchange Rate

NFA – Non-Foreign Exchange Assets

NGO – Non-Governmental Organization

NHB – National Housing Bank

NPA – Non-Performing Assets

NSC – National Statistical Commission

NSSF – National Small Savings Fund

 

O

OD – Over Draft

ODA – Official Development Assistance

OMO – Open Market Operations

 

P

PACS – Primary Agriculture Credit Societies

PDAI – Primary Dealers Association of India

PDO – Public Debt Office

PIO – Persons of Indian Origin

PO – Principal Office

PRB – Primary Revenue Balance

PSE – Public Sector Enterprises

PUC – Paid Up Capital

 

R

RD – Revenue Deficit

RDBMS – Relational Database Management System

RE – Revenue Expenditure

REC – Rural Electrification Corporation

REER – Real Effective Exchange Rate

RIDF – Rural Infrastructure Development Fund

RoC – Registrars of Companies

RR – Revenue Receipts

RRB – Regional Rural Bank

RTP – Reserve Tranche Position

RWA – Risk Weighted Asset

 

S

SAS – Statistical Analysis System

SCARDB – State Cooperative Agriculture and Rural Development Bank

SCB – State Cooperative Bank

SCB – Scheduled Commercial Bank

SDDS -Special Data Dissemination Standards

SDR – Special Drawing Right

SEBI – Securities and Exchange Board of India

SIFI – Systemically Important Financial Intermediaries

SEBs – State Electricity Boards

SGSY – Swarnajayanthi Gram Swarrojgar Yojana

SHGs – Self-Help Groups

SIDBI – Small Industries Development Bank of India

SIDC – State Industrial Development Corporation

SJSRY – Swarna Jayanti Shahari Rojgar Yojana

SLR – Statutory Liquidity Ratio

SMG – Standing Monitoring Group

SNA – System of National Accounts

SRWTO – Small road & Water Transport Operators

SSI – Small-Scale Industries

STRIPS – Separate Trading for Registered Interest and Principal of Securities

 

T

TB – Treasury Bills

TC – Temporary Change

TT – Telegraphic Transfer

TFTS – Trade for Trade Settlement

 

U

UCB – Urban Cooperative Bank

UCN – Uniform Code Number

UNDP – United Nations Developement Programme
UNICO – Umbrella Organisation for Large Cooperative Banks in Europe
UNDP – United Nations Development Programme
UNIDO – United Nations Industrial Development Organisation
UNME – Urban Non-Manual Employees

UTI – Unit Trust of India

 

V

VC – Venture Capital

 

W

WPI – Wholesale Price Index

WTO – World Trade Organisation

 

Y

Y-o-Y – Year-on-Year

YTM – Yield to Maturity

 

Z

ZTC – Zonal Training Centre

 

 

Other important terms

 


What is a Repo Rate?

  • Rate at which our banks borrow rupees from RBI.
  • A reduction in the repo rate will help banks to get money at a cheaper rate.
  • When the repo rate increases, borrowing from RBI becomes more expensive.

What is Reverse Repo Rate?

  • Opposite of Repo rate.
  • Rate at which Reserve Bank of India (RBI) borrows money from banks.
  • RBI uses this tool when it feels there is too much money floating in the banking system.
  • An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates.

What is CRR Rate?

  • Amount of funds that the banks have to keep with RBI.
  • An increase in CRR by RBI leads to reduction in the amount for lending to public,with the banks.
  • Used for draining out excessive money from the banks.

What is SLR Rate?

  • Amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers.
  • Used to control the expansion of bank credit.
  • SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

What is Bank Rate?

  • Also referred as the discount rate, is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries.
  • Central banks use this tool to control the money supply.

What is Inflation?

  • Increase in the price of bunch of Goods and services produced in the Indian economy.
  • Increase occurs when there is an increase in the average level of prices in Goods and services.
  • Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods.

What is Deflation?

  • Continuous decrease in prices of goods and services.
  • Occurs when the inflation rate becomes negative (below zero) and stays there for a longer period.

What is PLR?

  • Prime Interest Rate
  • Interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers).
  • Some banks use the name “Reference Rate” or “Base Lending Rate” to refer to their Prime Lending Rate.

What is Deposit Rate?

Interest Rates paid by a depository institution on the cash on deposit.

What is FII?

  • FII (Foreign Institutional Investor)
  • Denotes an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks.
  • Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.
  • FII’s generally buy in large volumes which has an impact on the stock markets.

What is FDI?

  • FDI (Foreign Direct Investment)
  • Purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in a Indian Company.

What is IPO?

  • Initial Public Offering.
  • First offering of shares to the general public from a company wishes to list on the stock exchanges.

What is Disinvestment?

  • Selling of the government stake in public sector undertakings.

What is Fiscal Deficit?

  • Difference between the government’s total receipts (excluding borrowings) and total expenditure.

What is Revenue deficit?

  • It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government.

What is GDP?

Gross Domestic Product

Measure of all of the services and goods produced in a country over a specific period; classically a year.

What is GNP?

  • Gross National Product
  • GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market results in GNP.

What is National Income?

  • National Income is the money value of all goods and services produced in a country during the year.

What is Per Capita Income?

  • The national income of a country, or region, divided by its population.
  • Per capita income is often used to measure a country’s standard of living.

What is Vote on Account?

A statement ,where the government presents an estimate of a sum required to meet the expenditure that it incurs during the first three to four months of an election financial year until a new government is in place, to keep the machinery running.

Difference between Vote on Account and Interim Budget?

  • Vote-on-account deals only with the expenditure side of the government’s budget, an interim Budget is a complete set of accounts, including both expenditure and receipts.

What is SDR?

  • Special Drawing Rights
  • An artificial currency created by the IMF in 1969.
  • Allocated to member countries and can be fully converted into international currencies so they serve as a supplement to the official foreign reserves of member countries.
  • Its value is based on a basket of key international currencies (U.S. dollar, euro, yen and pound sterling).

What is SEZ?

  • Special Economic Zone.
  • A geographical region that economic laws which are more liberal than the usual economic laws in the country.
  • Motto behind SEZ’s is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.

 

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