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. However, since banking is a significant part of our business and personal life, it is useful for consumers to learn some common banking terms.
ATM (Automatic Teller Machines):
Bouncing of a cheque:
Core Banking Solutions (CBS):
CRR (Cash Reverse Ratio):
It is a card issued by the bank so the customers can withdraw their money from their accounts electronically.
The way in which a bank keeps money in a deposit account in the same way the Depository Company converts share certificates into electronic form and keep them in a Demat account.
Dishonor of Cheque:
Non-payment of a cheque by the paying banker with a return memo giving reasons for the non-payment
It is a type of banking in which we can conduct financial transactions electronically. RTGS, Credit cards, Debit cards etc come under this category.
EFT – (Electronic Fund Transfer):
In this we use Automatic teller machine, wire transfer and computers to move funds between different accounts in different or same bank.
It is the amount of Funds borrowed by the government to meet the expenditures.
It is an increase in the quantity of money in circulation without any corresponding increase in goods thus leading to an abnormal rise in the price level
Initial Public Offering (IPO):
It is the time when a company makes the first offering of the shares to the public.
Doing banking from a cubicle from which food, newspapers, tickets, etc are also sold
It is a financial ratio which gives us an idea or a measure of a company’s ability to meet its financial losses.
It is the ability of converting an investment quickly into cash with no loss in value.
The product of the share price and number of the company’s outstanding ordinary shares.
It is a kind of security which one offers for taking an advance or loan from someone.
These are investment schemes. It pools money from various investors in order to purchase securities.
it refers to the Central Government policy with respect to the quantity of money in the economy, the rate of interest and the exchange rate
Non-bank ATM / White-labeled ATM:
An ATM or cash machine that does not prominently display a bank’s name or logo. A fee will be charged for cash withdrawals in these ATMs and they don’t accept deposits
Non-performing Assets (NPAs):
NPA or non-performing Assets are loans given by a bank on which repayments or interest payments are not being made on time
Permanent Account Number (PAN):
PAN is a number issued by the Income Tax Department to their tax payers.
Plastic money is a name given to Credit cards, Debit cards, ATM cards anf International Cards issued by banks
Point of Sale (PoS):
PoS refers to a location at which a payment of a card transaction occurs
Prime Lending Rate (PLR):
Rate of interest at which a bank gives loan to its most reliable customer i.e., customer with ‘zero risk’
It is a book where all the bank transactions are recorded. They are mainly issued to Current or Savings Bank account holders.
Commercial banks borrow funds by the RBI if there is any shortage in the form of rupees. If this rate increases it becomes expensive to borrow money from RBI and vice versa.
Reverse Repo Rate:
It is the exact opposite of the repo rate. It is the rate at which RBI borrows money from banks when it feels there is too much money floating in the banking system
Special Drawing Rights (SDR):
It is a reserve asset (Paper Gold) created within the framework of the International Monetary Fund in an attempt to increase international liquidity
SLR (Statutory Liquidity Ratio):
It is amount that a commercial bank should have before giving credits to its customers which should be either in the form of gold, money or bonds.
He/she is a staff member of the bank who cashes cheques, accepts deposits and perform different banking services for the general mass.
When financial institutions and banks undertake activities related to banking like investment, issue of debit and credit card etc then it is known as universal banking.
Internet banking is sometimes known as virtual banking. It is called so because it has no bricks and boundaries. It is controlled by the World Wide Web.
It is similar to retail banking with a slight difference that it mainly focuses on the financial needs of the institutional clients and the industry.
It is a bond that is sold at good discount as it has no coupon.