Banking Terms

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Banking Terms 2017-06-06T06:25:14+00:00

An Affidavit is a written sworn statement to be true by the person signing it, before someone authorised by the court of law.

Cash Credit is an arrangement in which the bank gives a short-term loan against the self-liquidating security.

CBS is networking of branches that provide banking services from any branch of the bank on CBS network and allows Customers to operate their accounts.

IFSC stands for Indian Financial System Code. Reserve Bank of India use these codes for RTGS and NEFT payment system. IFSC code consists of 11 Characters. First 4 digit tells the identity of the bank, 5th digit is default as 0 and last 6 digits display the branch identity.
For example SBIN004187.

MSF rate is the rate at which banks borrow funds overnight from the Reserve Bank of India against approved government securities.

Magnetic Ink Character Recognition code is appearing at the bottom of the cheque which contains 9 digits. First 3 Digits contains City PIN Code, Next 3 contains bank code, and last 3 digit contains Branch Code like 380002006.

NEFT allows funds transfer from one bank to another, but it is a little bit different from RTGS.As compared to RTGS, NEFT is slower. The transfer is not direct in NEFT i.e. To transfer the money from one bank to another; RBI acts as a service provider.

An asset, with the leased asset, becomes non-performing when it ceases to generate income for the bank.The Duration of NPA declaration is of 90 days.

Participatory Notes are derivative instruments. It is used by overseas High Net Worth Individuals, hedge funds and Foreign Institutional Investors, who are not registered with SEBI.

The rate at which rupees is borrowed from RBI for our banks.Banks borrow money from RBI when they have shortage of funds. A minimisation in the repo rate will help banks to get money at a cheaper rate.

Borrowing from RBI become expensive, when Repo Rate increases.

It is the exact opposite of Repo rate. The rate at which Reserve bank of India(RBI) borrows money from bank is called Reverse Repo Rate. This tool is used by RBI when it feels that there is too many money floating in the banking system.

Banks are always glad to land money to RBI since their money is in safe hands with a good interest. If Reverse Repo Rate increases then it can cause the bank to transfer more funds to RBI due to this attractive interest rates.

RTGS is also a fund transfer system where money or security can transfer from one place to another on a “gross basis” and on “real time” In “real time” means the transaction is completed as soon as they are processed.

SLR is an amount that is maintained and determined by RBI to control the expansion of the bank credit. A commercial bank needs to retain the SLR amount in the form of gold, cash or bonds before providing credit to its customers.

SDR is created in 1967 by the International Monetary Fund. It is a new form of international reserve assets. SDR value depends on the portfolio of widely used countries.

SDR is a new form of International reserve assets, created by the International Monetary Fund in 1967. 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.

The amount of funds that the banks have to keep with RBI is called Cash Reserve Ratio. The available amount with the banks comes down, If RBI decides to increase the percent of this. This method (increase of CRR rate) is used by RBI, to drain out the excessive money from the banks.

It is the rate of interest which a central bank charge on the loans, It is also known as the discount rate and advances that it extends to commercial banks and other financial intermediaries. To control the money supply, changes in the bank rate are often used by central banks.

The increase in the price of a bunch of Goods and services that project the Indian economy is called Inflation. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services.

When there are fewer Goods and more buyers inflation happens; Since there are more demand and less supply of the goods, this will result in an increase in the price of Goods.

The continuous decrease in prices of goods and services is Deflation. When the inflation rate becomes negative (below zero) then Deflation occurs and stays there for a longer period.

SEZ implies Special Economic Zone is one of the pieces of government’s strategies in India. An extraordinary Economic Zone is a land district that financial laws which are more liberal than the typical monetary laws in the nation.

The essential aphorism behind this is to increment the investment from foreign, improvement of a foundation, openings for work and increment the income level of the general population.

National Income is the cash estimation of all commodity and enterprises created in a nation during the year.

Gross National Product is measured as GDP, in addition, to pay to citizen from expense made abroad less salary earned by non-natives(foreigners) in a household stuff.

The Total national output or Gross domestic product is a measure of the greater part of products delivered in a nation over a particular period; traditionally a year. Gross domestic product over 2008-09 is 6.7%

The national gain of a nation, or locale, separated by its populace. Per capita earnings are frequently used to quantify a nation’s standard of living.Per capita pay amid 2008-09 evaluated by CSO: Rs.25, 494.

It describes that where the net sum got (by expenses and different structures) neglects to meet the positive net add up to be gotten by the government. Income shortfall in 2009-10 is proposed at 4.8% of a Gross domestic product.

It is the distinction between the administration’s aggregate receipts (barring borrowings) and aggregate use. Financial shortage in 2009-10 is proposed at 6.8% of a Gross domestic product.

The Offering of the administration stake out in the public region business.

An initial public offering is the first sale of stock. This is the principal offering of offers to the overall population from an organisation wishes to list on the stock trades.

FDI (Foreign Direct Venture) happens with the buy of the “physical resources or a lot of possession (stock) of an organisation in another nation keeping in mind the end goal to pick up a measure of administration control” (Or) An outside organisation having a stake in an Indian Organization.

FII (Foreign Institutional Investor) used to mean a shareholder, generally as an organisation. A foundation set up outside India, which proposes to put resources into an Indian market, at the end of the day purchasing Indian stocks.

FII’s by and large investment in substantial volumes which affect the stock exchange. Institutional Financial specialists incorporate, Insurance Agencies, Banks, and so forth.

Monetary policy is the procedure by which the administration, national bank, of nation controls (i) the supply of cash, (ii) accessibility of cash, and (iii) cost of cash or rate of interest.

With a specific end goal to achieve an arrangement of targets situated towards the development and steadiness of the economy.

A Demand draft is an instrument utilised for affecting the exchange of cash. It is a Negotiable Instrument.

Check and Demand-Draft both are utilised for Transfer of cash. You can 100% trust a DD. It is a financier’s check.

A check might be shamed for an absence of assets a DD can not. A check is composed by an individual and Demand draft is issued by a bank. Individuals trust banks more than people.

Cheque is a debatable instrument educating a Bank to pay a particular sum from a predetermined record held in the creator/contributor’s name with that Bank.

A bill of trade drawn on a predefined broker and payable on demand.”Written arrange guiding a bank to pay cash”.

A genuine financial recession must be affirmed if GDP (Gross Domestic Product)growth is negative for a time of at least two continuous quarters.

Foreign exchange reserves (likewise called Forex saves) in a strict sense are just the outside cash stores and securities held by national banks and fiscal authorities.

However, the term in prevalent utilisation generally incorporates foreign exchange and gold, SDRs and IMF save positions.

Mutual funds are speculation organisations that pool cash from financial specialists everywhere and offer to offer and purchase back its offers consistently and utilise the capital in this manner brought to put up in securities of various organisations.

The shared reserve will have a store administrator that exchanges the pooled cash all the time. The net continues or misfortunes are then normally conveyed to the investors yearly.

SEBI is the controller for the Securities Market in India. Initially set up by the Government of India in 1988, it obtained statutory frame in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Led by C B Bhave.

The Small Industries Development Bank of India is a state-run bank meant to help the development and advancement of smaller scale, little and medium-scale enterprises in India.

Set up in 1990 through a demonstration of parliament, it was joined at first as a completely possessed auxiliary of Industrial Development Bank of India.

Fiscal policy is the utilisation of government spending and income gathering to impact the economy. These approaches influence impose rates, loan fees and government spending, with an end goal to control the economy.

A Fiscal policy is an extra technique to decide open income and open consumption.

The National Association of Software and Services Companies (NASSCOM), the Indian assembly of trade is a consortium that fills in as an interface to the Indian programming industry and Indian BPO industry.

Keeping up close collaboration with the Government of India in planning National IT approaches with particular concentrate on IT programming and administrations keeping up a best in class data database of IT programming and administrations related exercises for utilisation of both the product engineers and additionally intrigued organisations abroad. Mr Som Mittal – President. Administrator Pramod Bhasin

The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India’s chief summit chamber covers a participation of more than 2 lakh organisations and experts the nation over. It was built up in 1920 by promoter Chambers, speaking to all districts of India.

As a peak industry body, ASSOCHAM speaks to the interests of industry and exchange, interfaces with Government on approach issues and collaborates with partner worldwide associations to advance respective monetary issues. President-Swati Piramal.

A global organisation, constrained by offers possessed by national banks which take care of universal money related and monetary participation and fills in as a bank for national banks.

A financial balance held by the UK manage an account with an outside bank, as a rule in the currency of that nation.

Cash loaned by a bank or other foundation which is repayable on request.

RBI offers to renegotiate office to assist the exporters by replacing a current obligation commitment with another.

The measure of an organisation’s capital that has been supported by shareholders.

It is a mix of Banking and consultancy administrations.

An unsecured, short-term debt instrument issued by a company for the financing of records receivable, inventories and meeting here and now liabilities.

Securities that are issued with the target of giving a supply of securities to the RBI to mediate in the market for overseeing liquidity.

It’s a fiscal strategy apparatus which enables banks to get cash through repurchase assertions and changing the everyday miscalculate in liquidity.

It’s an action by a RBI to plus or minus liquidity in its money to or from a bank or a gathering of banks.

It is an instrument of obligation of the bond backer to the holders.

A long-term security bearing a settled rate of intrest, issued by an organisation and secured against resources.

A common reserve’s cost for each offer or trade exchanged store’s (ETF) per-share value.

A dynamic record catering for successive stores and withdrawals with a cheque.

A store account held at a bank or other budgetary organisation that gives key security and a modest financing cost.

A financial strategy in which RBI buys government securities or different securities from the market to lower loan costs and increment the cash supply

ECS is an electronic method of assets exchange starting with one financial balance then onto the next and can be utilized for both.

A global monetary establishment that offers advances to middle-income creating nations.

A self-sufficient office in India upgrading human-asset improvement through faculty appraisal choice and enlistment of Officers and Clerks in Indian banks.

Liquidity portrays how much a benefit or security can be rapidly purchased or sold in the market without influencing the advantage’s cost.