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Important Banking Terms for upcoming SBI Exam

1.Bank Rate--It is the rate at which the central bank lends commercial banks for the long terms without their securities. In India it is the rate at which RBI lends money to the commercial banks in simple terms.

2.Base Rate--earlier this was the prime lending rate. It is the minimum rate at which the commercial bank lends to its prime customers. This is decided by the individual banks now.

3.FPO--It stands for follow on public offering. When any financial institution or business sells its share in the public that has already sold its share, It is called follow on public offering.

4.Repo Rate--Repo rate means a purchase and sale of agreement. It is a contract to buy securities and then sell them back at an agreed future date and price. It is thus revenue for short term investment of surplus funds. From RBI point of view it is called a short term lending and from banks point of view it is called short term borrowing.

5.Reverse Repo Rate--Reverse Repo Rate is an instrument of borrowing funds for a short period and involves selling a security and simultaneously agreeing to repurchase it at a stated future date for slightly higher price. From RBI point of view it is called a short term borrowing and from banks point of view it is called a short term lending.

6.SLR--This is a minimum Reserve which every bank has to maintain with itself in the most liquid form to meet any demand of the depositors.

7.Amortizing Loan--In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments.

8.Marginal Standing Facility--Marginal standing facility is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely.

9.Non Performing Asset--A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. Definition: A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days

10.Cash Reserve Ratio--It is the amount of fund that bank has to keep with RBI.RBI uses this method to drain out excessive money from Banks.

5 Banking and SSC : Important Banking Terms for upcoming SBI Exam 1.Bank Rate--It is the rate at which the central bank lends commercial banks for the long terms without their securities. In India it is th...

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