Important Banking Terminology - Terms & Definations For LIC AAO Exam - IBPS SBI Clerks 2016 Pdf

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Here are some of the important banking terminology usefull for upcoming competitive exams like LIC AAO , SBI Clerk , IBPS SO , IBPS PO and Other Exams . Keep Follwoing Our Site Updates For General Knowlegde Updates Helpful For Interviews and Online Exams 

indian banking terminology pdf Jan Feb 2016 Bankersadda LIC AAO

- The Reserve Bank of India is the apex bank 
of the country, which was constituted under the RBI Act, 1934 to regulate the other banks, issue of bank notes and maintenance of reserves with a view to securing the monetary stability in India.

Demand Deposit — A Demand deposit is the one which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking account or savings account in a bank.

Time Deposit - Time deposit is a money deposit at a banking institution that cannot be withdrawn for a certain “term” or period of time. When the term is over it can be withdrawn or it can be held for another term.

Fixed Deposits - FDs are the deposits that are repayable on fixed maturity date along with the principal and agreed interest rate for the period. Banks pay higher interest rates on FDs than the savings bank account.

Recurring Deposits - These are also called cumulative deposits and in recurring deposit accounts, a certain amounts of savings are required to be compulsorily deposited at specific intervals for a specified period.

Savings Account - Savings account is an account generally maintained by retail customers that deposit money (i.e. their savings) and can withdraw them whenever they need. Funds in these accounts are subjected to low rates of interest.

Liquidity - Assets which can easily be converted into cash money are said to have liquidity. Land does not possess liquidity at it takes longer time to get converted into cash.

Liquidity Ratio - The commercial banks under banking regulations have to maintain a certain specified proportion of their total deposits of various categories in liquid assets. This maintainable proportion is called liquidity ratio.

VAT (Value Added Tax) - VAT seeks to tax the value added at every stage of  manufacturing and sale,with a provision of refunding the amount of VAT already paid at the earlier stages to avoid double taxation. In other words, the tax already paid can be
claimed at the next stage of value addition.

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.

NRE Accounts - Non-Resident External accounts are the ones in which NRIs remit money in any permitted foreign currency and the remittance is converted to Indian rupees for credit to NRE accounts. The accounts can be in the form of current, saving, FDs, recurring deposits. The interest rates and other terms of these accounts are as per the RBI directives.

Bounced Cheque - when the bank has not enough funds in the relevant account or the account holder requests that the cheque is bounced (under exceptional circumstances) then the bank will return the cheque to the account holder. The beneficiary of the cheque will have not been paid. This normally incurs a fee from the bank.

Current Accounts - These accounts are maintained by the corporate clients that may be
operated any number of times in a day. There is a maintenance charge for the current accounts for which the holders enjoy facilities of easy handling,overdraft facility etc.

Commercial Bank - Commercial Bank is an institution of finance. It deals with the banking
services through its branches in whole of the country. Operation of current accounts, deposits, granting of loans to individuals and companies etc. are various functions of the commercial bank.

Dear Money - Dear money is that money which can only be borrowed at a high rate of interest. In dear money policy, bank rate and other rates of interest are high and as a result borrowing becomes expensive. Dear money policy is deliberate policy which is adopted by the monetary authorities to check inflation in the economy.

Giffin Goods - Giffin goods have the positive relationship between price and quantity demanded and as a result demand curve of Giffin goods slopes upward from left to right. This phenomenon was first observed by Sir Robert Giffin in relation to the demand for bread by poor labours.

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