This page include a glossary of Important terms which are being discussed and asked in competitive exams. We have been updating a term daily.
- 26th Nov 2015
Credit-Worthiness: This is the judgement of an organization which is assessing whether or not to take a particular individual on as a customer. An individual might be considered credit-worthy by one organization but not by another. Much depends on whether an organization is involved with high risk customers or not.
- 25th Nov 2015
Time Deposit: Time deposit is a money deposit at a banking institution that cannot be withdrawn for a certain “term” or period of time. When the term is over it can be withdrawn or it can be held for another term. - 23rd Nov 2015
FCNR Accounts: Foreign Currency Non-Resident accounts are the ones that are maintained by the NRIs in foreign currencies like USD, DM, and GBP etc. The account is a term deposit with interest rates linked to the international rates of interest of the respective currencies. - 22nd Nov 2015
Demand Deposit: A Demand deposit is the one which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking account or savings account in a bank.
- 21st Nov 2015
Tier 2 capital: Tier 2 capitals, or supplementary capital, include a number of important and legitimate constituents of a bank’s capital base. Things which include in tier 2 capital
• Undisclosed reserves and cumulative perpetual preference shares.
• Revaluation Reserves General Provisions and loss reserves
• Hybrid debt capital instruments such as bonds.
• Long term unsecured loans Debt Capital Instruments.
• Redeemable cumulative Preference shares
• Perpetual cumulative preference shares. - 19th Nov 2015
Tier 1 capital : A term used to describe the capital adequacy of a bank. Tier I capital is core capital; this includes equity capital and disclosed reserves. Tier 1 is a bank’s core capital. The main components of Tier 1 are ordinary shareholders equity; retained earnings; perpetual (undated) non-cumulative preferred stock (Tier 1 Preferred); reserves created by appropriations of retained earnings, share premiums and other surpluses; and minority interests. The equity and reserves element of Tier 1 is often referred to as ‘Core Tier 1’. The Tier 1 Preferred elements are often known as ‘hybrid instruments’ because they have a mix of both debt and equity features.
- 18th Nov 2015
Certificate of Deposit:: A time deposit that is payable at the end of a specified term. CDs generally pay a fixed interest rate and generally offer a different interest rate than other types of deposit accounts. If an early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. CD is sold at discount value and being a money market instrument, can be transferred to other person through negotiation. - 17th Nov 2015
General Insurance Corporation of India : The entire general insurance business in India was nationalized by the Government of India (GOI) through the General Insurance Business (Nationalization) Act (GIBNA) of 1972. 55 Indian insurance companies and 52 other general insurance operations of other companies were nationalized through the act.
The General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed to control and operate the business of general insurance in India.
The GOI transferred all the assets and operations of the nationalized general insurance companies to GIC and other public-sector insurance companies. After a process of mergers and consolidation, GIC was re-organized with four fully owned subsidiary companies: National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited.
GIC and its subsidiaries had a monopoly on the general insurance business in India until the landmark Insurance Regulatory and Development Authority Act (IRDA Act) of 1999 came into effect on 19 April 2000. This act also amended the GIBNA Act and Insurance Act of 1938. The act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized the insurance business in India - 15th Nov 2015
Marginal Standing Facility: The Marginal Standing Facility (MSF) Scheme is operational on the lines of the existing Liquidity Adjustment Facility – Repo Scheme (LAF – Repo) i.e. commercial banks can borrow money from RBI. The basic difference between Repo and MSF scheme is that in MSF banks can use the securities under SLR to get loans from RBI and hence MSF rate is 1% more than repo rate. - 13th Nov 2015
CRR (Cash Reserve Ratio):: CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don’t hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as equivalent to holding cash with RBI. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. - 12th Nov 2015
Bank Rate :: Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Base Rate / Benchmark Prime Lending Rate. Thus any revision in the Bank rate indicates that it is likely that interest rates on your deposits are likely to either go up or go down, and it can also indicate an increase or decrease in your EMI. - 10th Nov 2015
Cheque Trancation System:: Cheque Truncation System (CTS) or Image-based Clearing System (ICS), in India, is a project undertaken by the Reserve Bank of India (RBI) in 2008, for faster clearing of cheques. CTS is based on a cheque truncation or online image-based cheque clearing system where cheque images and magnetic ink character recognition (MICR) data are captured at the collecting bank branch and transmitted electronically. - 9th Nov 2015
NPA :: Non-performing assets, also called non-performing loans, are loans made by a bank or finance company, on which repayments or interest payments are not being made on time. A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments. - 7th Nov 2015
Foreign Exchange Reserves :: Foreign exchange reserves (also called FOREX Reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. - 6th Nov 2015
Financial Inclusion :: Financial Inclusion simply means banking the un-banked. It can be referred to as bringing the daily wage earners, landless labours, people living in slum areas etc. to the banking channel. Financial inclusion gives them an opportunity to save for themselves and in turn help the government to directly credit subsidy to their accounts. From time to time there have been many financial inclusion schemes that have come up, the latest of which was Pradhan Mantri Jan Dhan Yojana, which proved to be very successful. - 5th Nov 2015
SWOT Analysis :: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. - 4th Nov 2015
Clearing House :: A department of an exchange or a separate legal entity that provides a range of services related to the clearance and settlement of trades and the management of risks associated with the resulting contracts. A clearing house is often central counterparty to all trades, that is, the buyer to every seller and the seller to every buyer. - 2nd Nov 2015
Direct Marketing :: Direct Marketing is a form of advertising that directly reaches to the customers on a personal basis (like phone calls, private mailings, etc) rather than traditional channel of advertising (like TV, Newspapers, etc).Types of Direct marketing: There are many types of direct marketing, only some important types are listed below and these are the most form of direct marketing.- Direct Mail Marketing:- Advertising material sent directly to home and business addresses. This is the most common form of direct marketing.
- Telemarketing:- It is the second most common form of direct marketing, in which marketers contact consumers by phone.
- Email Marketing:- This type of marketing targets customers through their email accounts.
