ATMs in case of ATMs located in six metro locations, viz.

BANKING TERMS & ABBREVIATIONS Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and
1) What do you know by currency chest? Hyderabad. At other locations, the savings bank account
Currency chests are operated by RBI so that they can holders can transact a minimum of five transactions
provide good quality currency otes to the public. (including both financial and non-financial
However, RBI has appointed commercial banks to open transactions) free of charge in a month at other bank
and monitor currency chests on behalf of RBI. The cash ATMs. Similarly, Basic Savings Bank Deposit Account
kept in currency chests is considered to be kept in RBI. holders will continue to get five free transactions. Banks
on their own can decide to offer more number of
2) What is a small coin depot? transactions free of cost to their customers. In case of
The bank branches are also authorised to establish charges to be levied on customers, the customer can be
Small Coin Depots to stock small coins. The Small Coin charged a maximum of Rs. 20/- per transaction (plus
Depots also distribute small coins to other bank service tax, if any) by his/her bank.
branches in their area of operation.
Q.5 What should a customer take in case of failed
3) What are soiled, mutilated and imperfect ATM transaction at other bank/white label ATMs,
banknotes? when his / her account is debited?
1. "Soiled note" means a note which, has become dirty Ans. The customer should file a complaint with the card
due to usage and also includes a two piece note issuing bank at the earliest. This process is applicable
pasted together wherein both the pieces presented even if the transaction was carried out at another
belong to the same note, and form the entire note. bank’s/non-bank’s ATM. In case of WLAs, the contact
2. Mutilated banknote is a banknote, of which a
portion is missing or which is composed of more DICGC (Deposit Insurance and Credit
than two pieces. Guarantee Corporation of India)
3. Imperfect banknote means any banknote, which is 1. Which banks are insured by the DICGC?
wholly or partially, obliterated, shrunk, washed, Commercial Banks: All commercial banks including
altered or indecipherable but does not include a branches of foreign banks functioning in India, local
mutilated banknote. area banks and regional rural banks are insured by the
4. DICGC.
Q.1 what is an Automated Teller Machine (ATM)? 2. What does the DICGC insure?
Ans. Automated Teller Machine is a computerized In the event of a bank failure, DICGC protects bank
machine that provides the customers of banks the deposits that are payable in India. The DICGC insures all
facility of accessing their account for dispensing cash deposits such as savings, fixed, current, recurring, etc.
and to carry out other financial & non-financial except the following types of deposits.
transactions without the need to actually visit their (i) Deposits of foreign Governments;
bank branch. (ii) Deposits of Central/State Governments;
(iii)Inter-bank deposits;
Q.2 What is White Label ATMs (WLAs)? (iv)Deposits of the State Land Development Banks with
Ans. ATMs set up, owned and operated by non-banks the State co-operative bank;
are called White Label ATMs. Non-bank ATM operators
are authorized under Payment & Settlement Systems Banking ombudsman scheme
Act, 2007 by the Reserve Bank of India. 1) The Banking Ombudsman Scheme enables a bank
customer for filing of complaints relating to certain
Q.3 What is Personal Identification Number (PIN)? services rendered by banks.
Ans. PIN is the numeric password which is separately 2) The Banking Ombudsman is a senior official
mailed / handed over to the customer by the bank while appointed by the Reserve Bank of India to redress
issuing the card. Most banks require the customers to customer complaints against deficiency in certain
change the PIN on the first use. Customer should not banking services.
disclose PIN to anybody, including to bank officials. 3) All Scheduled Commercial Banks, Regional Rural
Customers should change the PIN at regular intervals. Banks and Scheduled Primary Co-operative Banks are
covered under the Scheme.
Q.4. Is the customer charged for ATM transactions? 4) The Banking Ombudsman does not charge any fee for
Ans. With effect from November 01, 2014, Savings bank filing and resolving customers’ complaints.
account holders can do a minimum of three transactions 5) The maximum compensation which a BO can help a
(including both financial and non-financial complainant to get is Rs. 10 lakhs.
transactions) free of charge in a month at other bank

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6) If a complaint is not settled by an agreement within a transferring the title to the other person, it is called
period of one month, the Banking Ombudsman endorsement.
proceeds further to pass an award. Before passing an
award, the Banking Ombudsman provides reasonable Merchant Banking : When a bank provides to a
opportunity to the complainant and the bank, to present customer various types of financial services like
their case. accepting bills arising out of trade, arranging and
7) If one is not satisfied with the decision passed by the providing underwriting, new issues, providing advice,
Banking Ombudsman, one can approach the appellate information or assistance on starting new business,
authority who is the Deputy Governor of the RBI acquisitions, mergers and foreign exchange.
. Money Laundering The process of creating the
Bridge Loan:-A loan made by a bank for a short period appearance that large amounts of money obtained from
to make up for a temporary shortage of cash. Bridge 1. serious crimes, such as drug trafficking or
loan covers this period between the buying the new and terrorist activity, originated from a legitimate
disposing of the old one. source.
Mortgage: Transfer of an interest in specific immovable
Credit Authorization Scheme:-Credit Authorization property for the purpose of offering a security for taking
Scheme was introduced in November, 1965 when P C a loan or advance from another. It may be existing or
Bhattacharya was the chairman of RBI. Under this future debt or performance of an agreement which may
instrument of credit regulation RBI as per the guideline create monetary obligation for the transferor
authorizes the banks to advance loans to desired (mortgagor).
sectors
GAAR: The full form of GAAR is : General Anti-
Open Market Operations:-An open market operation Avoidance Rules. Tax Avoidance is an area of concern
is an instrument of monetary policy which involves across the world. The rules are framed in different
buying or selling of government securities from or to countries to minimize such avoidance of tax. It is a set of
the public and banks. general rules enacted so as to check the tax avoidance.
BPLR: In banking parlance, the BPLR means the
Moral Suasion:-Moral Suasion is just as a request by
the RBI to the commercial banks to take so and so Benchmark Prime Lending Rate. However, with the
action and measures in so and so trend of the economy. introduction of Base Rate (explained below), BPLR has
RBI may request commercial banks not to give loans for now lost its importance and is made applicable
unproductive purpose which does not add to economic normally only on the loans which have been sanctioned
growth but increases inflation. before the introduction of Base Rate (i.e. July 2010).

Special Drawing Rights (SDRs):-It is a reserve asset Prime Lending Rate (PLR): The rate at which banks
(known as ‘Paper Gold’) created within the framework lend to their best (prime) customers. It is usually less
of the International Monetary Fund in an attempt to than normal interest rate.
increase international liquidity, and now forming a part
of countries official forex reserves along with gold, Wholesale Banking: Wholesale banking is different
reserve positions in the IMF and convertible foreign from Retail Banking as its focus is on providing for
currencies. financial needs of industry and institutional clients.

Bouncing of a cheque: Capital Adequacy Ratio (CAR):- Capital adequacy ratio

Where an account does not have sufficient balance to measures the amount of a bank’s capital expressed as a
honour the cheque issued by the customer, the cheque percentage of its credit exposure. Globally, the capital
is returned by the bank with the reason "funds adequacy ratio has been developed to ensure banks can
insufficient" or "Exceeds arrangement". This is known absorb a reasonable level of losses before becoming
as 'Bouncing of a cheque'. insolvent. Indian banks are expected to maintain a
minimum capital adequacy ratio of 9 per cent (Rs 9 as
Demat Account: The term "demat", in India, refers to a capital for every Rs 100 in loan or asset)
dematerialised account for individual Indian citizens to
trade in listed stocks or debentures. Asset – Liability Mismatch:-In finance, an assets
liabilities asset–liability mismatch occurs when the
Endorsement: When a Negotiable Instrument contains, financial terms of an institution's and do not
on the back of the instrument an endorsement, signed correspond.
by the holder or payee of an order instrument,

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What is Asset Management Companies? Basel Committee on Banking Supervision is an
A company that invests its clients' pooled fund into institution created by the Central Bank governors of the
securities that match its declared financial objectives. Group of Ten nations.
Asset management companies provide investors with
more diversification and investing options than they What is LIBOR?
would have by themselves. Mutual funds, hedge funds London InterBank Offered Rate. An interest rate at
and pension plans are all run by asset management which banks can borrow funds, in marketable size, from
companies. These companies earn income by charging other banks in the London interbank market.
service fees to their clients.
What is STRIPS?
What is Liquidity Adjustment Facility(LAF)? Separate Trading for Registered Interest & Principal
A tool used in monetary policy that allows banks to Securities.
borrow money through repurchase agreements. This
arrangement allows banks to respond to liquidity What do you mean by term “CASA” related to bank?
pressures and is used by governments to assure basic CASA stands for Current Account Savings Account. The
stability in the financial markets. CASA ratio shows how much deposit a bank has in the
form of current and saving account deposits in the total
What is Bancassurance? deposit. A higher CASA ratio means better operating
It is the term used to describe the partnership or efficiency of the bank because on current account there
relationship between a bank and an insurance company is no interest payable whereas on savings account a tiny
whereby the insurance company uses the bank sales 3.5% interest is payable by the bank. CASA ratio shows
channel in order to sell insurance products. how much of the deposit of the bank comes from the
current and savings deposit.
What is Balance of Trade?
The value of a country’s exports minus the value of its What is CBS?
imports. Unless specified as the balance of merchandise CBS stands for CORE banking solutions under which the
trade, it normally incorporates trade in services, branches of the banks are interconnected with each
including earnings (interest, dividends, etc.) on financial other through intra net with a central database server.
assets. Now, with this facility, a person having an account in a
certain branch of the bank can operate from any other
What is Balance of Payments? branch of the same bank. He need not visit the same
A list of all of a country’s international transactions for a branch to operate his account. The CORE word in CBS
given time period, usually one year. Payments into the stands for Centralized Online Real time Exchange.
country (receipts) are entered as positive numbers,
called credits; Payments out of the country (payments) What is Inflation?
are entered as negative numbers called debits. A single Ans. The rise in the prices of goods or service in an
numbers summarize all of a country’s international economy over a certain period of time is known as
transactions: the balance of payments surplus. inflation.

What is NOSTRO Account? Name the types of “Inflation”?

A Nostro account is maintained by an Indian Bank in the Wage inflation
foreign countries. Price power inflation
What is VOSTRO Account? Cost-push inflation
Vostro account is maintained by a foreign bank in India Sectorial inflation
with their corresponding bank. Stagflation
Mild inflation
What is IMPS? Hyper-inflation
Immediate Payment Service. It is an instant interbank
electronic fund transfer service through mobile phones. What are the effects of “Inflation”?
Both the customers must have MMID (Mobile Money Ans. Following are the effect of inflation:-
Identifier Number). For this service, we don’t need any It decreases the real value of money
GPS-enabled cell phones. 2. It discourage investment and savings
3. It leads to shortage of goods
What is BCBS? 4. Mitigate economic recessions
5. Reduces the level of debt
6.

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What is “Money Laundering”? PSBs: PUBLIC SECTOR BANKS
The process of converting illegal money into legal 2. SNBCs: SCHEDULE NON COMMERCIAL BANKS
money is Money Laundering. According to Section 3 of 3. SENSEX: SENSITIVE INDEX OF STOCK EXCHANGE
the Prevention of Money laundering Act 2002 as: 4. GNP: GROSS NATIONAL PRODUCT
“Whosoever directly or indirectly attempts to indulge or 5. KYC: KNOW YOUR CUSTOMER
knowingly assists or is involved in any process or 6. RTGS: REAL TIME GROSS SETTLEMENT
activity connected with the proceeds of crime and is 7. NEFT: NATIONAL ELECTRONIC MONEY TRANSFER
projecting it as the untainted property shall be guilty of 8. EFT: ELECTRONIC FUND TRANSFER
the offence of money laundering”. 9. CBS: CORE BANKING SOLUTIONS
10. LIBOR: LONDON INTERBANK OFFERED RATE
What do you mean by narrow banking? 11. MIBOR: MUMBAI INTERBANK OFFERED RATE
It is the system of banking under which the bank 12. MIBID: MUMBAI INTERBANK BID RATE
accepts deposits from the public and places the funds 13. SARFAESI: SECURITISATION AND
accepted in 100 percent risk free assets with maturity RECONSTRUCTION OF
matching for its liabilities. The bank takes no risk of FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY
lending at all. INTEREST
14. CAMELS: CAPITAL ADEQUECY RATIO, ASSET
IFSC (Indian Financial System Code): QUALITY,
Indian Financial System Code is an alpha-numeric code MANAGEMENT OF EFFECTIVENESS, EARNING OF
that uniquely identifies a bank-branch participating in PROFITABILITY, LIQUIDITY, SYSTEM AND CONTROLS
the NEFT system. This is an 11 digit code with the first 4 15. CAR: CAPITAL ADEQUECY RATIO
alpha characters representing the bank, The 5th 16. FIIs: FOREIGN INSTITUTIONAL INVESTMENTS
character is 0 (zero).and the last 6 characters 17. FDI: FOREIGN DIRECT INVESTMENT
representing the bank branch. 18. IPO: INITIAL PUBLIC OFFERING
For ex: PNBN0014976 : 19. MICR: MAGNETIC INK CHARACTER READER
i. First 4 character PNBN – refers to Punjab National 20. BIRD: BANKERS INSTITUTE OF RURAL
Bank. DEVELOPMENT
ii. 0 is a control number. 21. IBA: INDIAN BANK ASSOCIATION
iii. last six characters (014976) represents the PNB 22. BPLR: BENCHMARK PRIME LENDING RATE
branch kurshi Road, Luck now. 23. ICICI: INDUSTRIAL CREDIT AND INVESTMENT
CORPORATION OF INDIA
MICR – Magnetic ink character Recognition :- 24. HDFC: HOUSING DEVELOPMENT FINANCE
MICR is 9 digit numeric code that uniquely identifies a CORPORATION
bank branch participating in electronic clearing scheme. 25. SWOT: STRENGETH, WEEKNESSES,
Used to identify the location of a bank branch. City (3) OPPORTUNITIES
Bank (3) Branch (3) The MICR code is allotted to a bank AND THREATS
branch is printed on the MICR band of cheques. MICR 26. SWIFT: SOCIETY FOR WORLDWIDE INTERBANK
used for electronic credit system. FINANCIAL TELECOMMUNICATION
27. FERA: FOREIGN EXCHANGE REGULATORY ACT
SWIFT Code :- 28. FEMA: FOREIGN EXCHANGE MANAGEMENT ACT
Society for Worldwide Interbank financial 29. CASA: CURRENT AND SAVING ACCOUNT
telecommunication India was 74th Nation to join SWIFT 30. NDTL: NET DEMAND AND TIME LIABILITIES
Network. 31. NASDAQ: NATIONAL ASSOCIATION FOR
SWIFT Code is a standard format of bank Identifier SECURITIES
code. This code is used particularly in International DEALERS AUTOMATED QUOTATIONS
transfer of money between banks. A majority of FOREX 32. CRISIL: CREDIT RATING AND INVESTMENT
related message are sent to correspondent banks SERVICES
abroad through SWIFT. INDIA LIMITED
SWIFT Code consist 8 or 11 character when code is 8 33. CIBIL: CREDIT INFORMATION BUREAU OF INDIA
digit, LIMITED
It is referred to primary office 34. NAV: NET ASSET VALUE
4 – bank code 35. ICRA: INDIAN CREDIT RATING AGENCY
2 – country code 36. CARE: CREDIT ANALYSIS AND RESEARCH LIMITED
2 – location code 37. WMAs: WAYS AND MEANS ADVANCES
3 – branch code (optional 38. ALM: ASSET LIABILITY MANAGEMENT
39. INFINET INDIAN FINANCIAL NETWORK

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40. OLTAS - On-line Tax Accounting System (OLTAS) for 82. UIDAI-Unique Identification Authority of India
Direct Taxes
41. TIN - Tax Information Network (TIN)
42. IMPS - Interbank Mobile Payment Service (IMPS) or
Immediate Payment Service
43. CDR- Corporate Debt Restructuring
44. CAD- Capital Account Deficit
45. REITs: Real Estate Investment Trusts
46. InvITs: Infrastructure Investment Trusts
47. ALM- Asset Liability Management
48. ASBA: Application Supported by Blocked Amount
49. CBS: Core Banking Solution
50. PIN: Personal Identification Number
51. CCEA – Cabinet Committee on Economic Affairs
52. CECA - Comprehensive Economic Cooperation
Agreement
53. CEPA – Comprehensive Economic Partnership
Agreement
54. DTAA – Double Taxation Avoidance Agreement
55. ECBs - External Commercial Borrowings
56. EFSF – European Financial Stability Facility
57. FINO- Financial Inclusion Network Operation
58. FIPB – Foreign Investment Promotion board
59. FSLRC – Financial Sector Legislative Reforms
Commission
60. CRAR: Capital to Risk-weighted Assets Ratio
61. LCR: Liquidity Coverage Ratio
62. TARC - Tax Administration Reform Commission
63. GIRO - Government Internal Revenue Order
64. FRBMA: Fiscal Responsibility and Budget
Management
Act
65. AMFI- Association of Mutual Fund in India.
66. TIEA – Tax Information exchange Agreement
67. GAAR - General anti avoidance rule
68. GSLV - Geo-Synchronous Launch Vehicle
69. PPP – Public Private Partnership & Purchasing
Power
Parity
70. PSLV – Polar Satellite Launch vehicle
71. TAPI - Turkmenistan-Afghanistan-Pakistan-India.
72. QFI -Qualified Foreign Investors
73. AD-Authorized Dealer.
74. ASSOCHAM-Associated Chambers of Commerce and
Industry of India.
75. BCSBI-Banking Codes and Standards Board of India.
76. BIS-Bank for International Settlements.
77. CDS-Credit Default Swap.
78. CEPA-Comprehensive Economic Partnership
Management.
79. FIMMDA-Fixed Income Money MARKETS and
Derivatives
Association.
80. FPI-Foreign Portfolio Investment.
81. IBRD-International Bank For Reconstruction And
Development.

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