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.
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
BIS – Bank for International Settlements
BoP – Balance of Payments
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
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
ECGC – Export Credit and Guarantee Corporation
ECS – Electronic Clearing Scheme
EEA – Exchange Equalization Account
EPF – Employees Provident Fund
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
GDP – Gross Domestic Product
GDR – Global Depository Receipt
GFD – Gross Fiscal Deficit
GIC – General Insurance Corporation
GPD – Gross Primary Deficit
HDFC – Housing Development Finance Corporation
HFT – Held For Trading
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
LBS – Locational Banking Statistics
LERMS – Liberalised Exchange Rate Management System
LIC – Life Insurance Corporation of India
MCA – Ministry of Company Affairs
MIS – Management Information System
MMSE – Minimum Mean Squared Errors
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
OD – Over Draft
ODA – Official Development Assistance
OMO – Open Market Operations
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
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
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
TB – Treasury Bills
TC – Temporary Change
TT – Telegraphic Transfer
TFTS – Trade for Trade Settlement
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
VC – Venture Capital
WPI – Wholesale Price Index
WTO – World Trade Organisation
Y-o-Y – Year-on-Year
YTM – Yield to Maturity
ZTC – Zonal Training Centre
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.