Important banking terms in India

Important banking terms in India:

 

There are large number of banking terms used in India.Banking terms are those that used basically in Banking industry.Some of the Important banking terms in India are as follows:

Commercial Bank: Commercial banks are profit making organisations that accept deposits from the general public and give money (loans) to people,business etc. The main objective of these banks is to obtain profits in the form of interest, commissions, etc.

Reserve Bank of India (RBI): Reserve Bank of India (RBI) is the Central Bank of India which controls the issue & supply of money in India.

Co-operative Banks: Co-operative banks are those banks whose main objective is to provide financial assistance to the weaker sections of the society.

Bank Rate: Bank Rate is the rate at which the Central Bank of India ie, RBI (Reserve bank of India) charge from the Commercial bank for lending funds to them. Whenever a bank needs fund or face shortage of funds they borrow funds from RBI at a particular rate. This rate is called the Bank Rate. 

Repo rate: Repo rate is the rate at which Reserve Bank of India (RBI) lends money to the commercial banks in case of any shortage of funds. Repo rate is the primary tool in the RBI ‘s Monetary & Credit policy  in India.

Also read: How to recharge with SBI Rewards points 2020?

Reserve Repo rate: Reserve Repo rate is the rate at which the Reserve Bank of India (RBI) burrows money from the commercial bank in case of any shortage of funds. It is also an important tool of the monetary policy of India.

Cash Reserve ratio (CRR): Cash Reserve Ratio (CRR) is a particular minimum fraction of the total deposits either as cash or deposits the commercial banks have to keep with RBI as Reserves. CRR is determined by RBI.

Statutory Liquidity Ratio (SLR): Statutory Liquidity Ratio (SLR) is the minimum proportion of deposits that commercial banks has to maintain with them in the form of liquid cash, gold or other securities

Non Performing Assets (NPA): A Non Performing Asset (NPA) is a loan or advance given by the bank & for which the bank has not received the interest or Principal amount for 90 days.

Mortgage: A mortgage is generally a loan sanctioned against real property such as a house or commercial property. The lender holds the asset as collateral until the borrower repays the full amount of the loan.

Money laundering: Money laundering refers to the process to hide illegally acquired money & converting it into legal money.

Bills of exchange: The bill of exchange is a negotiable instrument which involves an unconditional order to pay a specific sum of money to a designated person or to the holder of the instrument, as indicated by the makeron the instrument. The bill of exchange is paid upon request or after a specified period.

Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR) is that quantity of funds that Banks has to be maintained with the Reserve bank of India (RBI) every time.RBI uses CRR to drain the excessive amount of money from the system.

Banking ombudsman: The Banking Ombudsman is a high-ranking official appointed by the RBI to address customer complaints against grievances in stipulated banking services covered by the 2006 Bank Ombudsman Scheme. Later modifications were made in 2017.

Bankruptcy: Bankruptcy is a legal process through which entities or individuals who cannot pay debts to creditors can seek relief from some or all of their debts. In most cases bankruptcy is imposed by the court order, often initiated by the debtor.

Bancassurance: Bancassurance is an agreement between a bank and an insurance company that allows the insurance company to sell its products to the bank’s clients,

 

About ANUP SINHA 94 Articles
My Name is Anup Sinha, the Founder of BankQna.Com. Here I share Contents on Banking & Investment. If you have any Query or Need Article on any Topic then Please Comment. Thank You.