Haryana BSEH SS NSQF BFSI cheat sheet

Bank = institution that accepts demand deposits repayable on order and lends from those deposits; the defining legal test is deposit-taking plus lending, not branch count.

RBI Act 1934, Section 22: only a company holding a licence from RBI may carry on banking business in India; unlicensed acceptance of deposits is an offence.

Scheduled bank = bank listed in the Second Schedule of the RBI Act; it must have paid-up capital and reserves of not less than Rs 5 lakh and satisfy RBI that its affairs are not conducted to the detriment of depositors.

Central bank functions of RBI: currency issue, banker to government, banker to banks, lender of last resort, custodian of foreign exchange reserves, credit control.

Financial system components: financial institutions, financial markets, financial instruments, and financial services; the four are interdependent, not sequential.

Insurance = transfer of a defined risk to an insurer for a premium; the insurer pools many independent exposures so that actual losses approximate expected losses (law of large numbers).

Bank vs NBFC: an NBFC cannot accept demand deposits, is outside the payment and settlement system, and is not covered by DICGC deposit insurance.

Indian financial-sector regulators: RBI (banking, payments, NBFCs), SEBI (securities), IRDAI (insurance), PFRDA (pensions), IFSCA (GIFT City).

KYC: identity and address of the customer must be verified before account opening; periodic re-KYC is risk-based - high risk more frequently, low risk at longer intervals.

Types of deposits: savings (interest-bearing, withdrawal limits apply), current (no interest, meant for business), fixed (lump sum, fixed tenure, premature withdrawal with penalty), recurring (fixed instalments).

Cheque crossing: general crossing (two parallel lines) means pay only through a bank account; account-payee crossing requires the collecting bank to credit the named account.

Negotiable Instruments Act 1881: cheque validity is 3 months from the date of issue; a stale cheque must be returned unpaid.

Demand draft is issued by a bank branch on another branch; it is payable on demand and is safer than a cheque because payment is assured by the issuing bank.

Loan classification and NPA: an asset becomes non-performing when interest or principal is overdue for more than 90 days; sub-standard, doubtful and loss assets follow.

CRR is the share of net demand and time liabilities kept as cash with RBI; SLR is the share held in approved liquid assets such as government securities.

Priority sector lending target for domestic scheduled commercial banks is 40% of adjusted net bank credit, with sub-targets for agriculture, micro enterprises, and weaker sections.

Types of bank accounts by operation: single, joint (former or survivor, either or survivor, jointly), and accounts for minors operated by a guardian.

Primary market = new issue of securities (IPO, FPO, rights issue); secondary market = trading of already-issued securities on an exchange.

Money market instruments have maturity up to one year: call money, treasury bills, commercial paper, certificates of deposit; capital market instruments are long-term.

Treasury bills are zero-coupon: issued at a discount to face value and redeemed at par, so the return is the difference between issue price and face value.

SEBI regulates the securities market; a stock exchange provides the trading platform, while a depository (NSDL/CDSL) holds securities in electronic form.

Mutual fund: pooled money from many investors managed by an AMC; NAV = (total assets minus liabilities) divided by number of units outstanding.

Merchant banking covers issue management, underwriting and corporate advisory; it is not the same as commercial banking.

Bancassurance = distribution of insurance products through a bank's branch network and customer base, usually under a corporate agency arrangement.

Leasing and hire purchase are asset-based finance: in leasing ownership stays with the lessor, in hire purchase ownership passes to the hirer on the final instalment.

Insurable interest: the insured must benefit from the subject's survival and suffer loss from its destruction; it must exist at the time of the loss in general insurance.

Utmost good faith (uberrimae fidei): both parties must disclose all material facts; non-disclosure or misrepresentation can make the contract voidable.

Indemnity applies to general insurance: the insured is restored to the pre-loss financial position, never better off; life insurance is a benefit policy, not indemnity.

Subrogation: after paying a claim, the insurer acquires the insured's right to recover from the third party who caused the loss.

Contribution: when more than one policy covers the same risk, insurers share the loss proportionately so the insured does not profit.

Proximate cause: the nearest effective cause of loss decides whether the claim is payable, not the last event in the chain.

Life insurance products: term (pure protection, no maturity value), endowment (protection plus maturity), ULIP (partly invested in market-linked funds with a lock-in).

Premium = mortality/risk charge + expense loading + savings component (for savings products); the risk premium rises with age and sum assured.

Service quality dimensions: reliability, responsiveness, assurance, empathy and tangibles; reliability (doing it right the first time) is the most important to customers.

Grievance redressal: a bank customer must first approach the branch, then the nodal officer, then the RBI Ombudsman under the Integrated Ombudsman Scheme if not resolved within the prescribed period.

Know-your-customer communication: explain charges, minimum balance rules, and terms before the customer signs; mis-selling is a service failure, not a sales tactic.

Sales funnel stages: prospecting, approach, need identification, presentation, objection handling, closing, and follow-up.

Needs-based selling: match the product to the customer's stated goal (e.g., term plan for protection, recurring deposit for a short-term goal) rather than pushing the highest-commission product.

Objection handling: acknowledge the concern, clarify the facts, and respond with evidence; never argue with or dismiss the customer.

Customer lifetime value = average annual profit per customer times expected years of relationship; retention is cheaper than acquiring a new customer.

Cross-selling works only after the primary need is met; upselling moves a customer to a higher-value variant of the same product.

UPI: instant account-to-account transfer using a virtual payment address (VPA); both payer and payee need registered mobile numbers linked to their bank accounts.

NEFT settles in batches throughout the day; RTGS is for high-value transactions and settles in real time; IMPS is available 24x7 for immediate transfer.

Card security: CVV is a 3-digit code on the back of the card, never to be shared; EMV chip cards generate a dynamic cryptogram for each transaction.

Two-factor authentication for card-not-present transactions requires something the customer has (OTP) plus something they know (PIN/password).

Phishing, vishing and smishing: fraudulent messages by email, voice call, or SMS respectively; banks never ask for PIN, OTP or password over any channel.

AEPS allows Aadhaar-based authentication for cash withdrawal and balance enquiry at micro-ATMs, useful in rural areas.

Digital lending apps must be regulated entities; the RBI's guidelines require disclosure of all charges and prohibit unauthorised access to customer data.

CBDC (digital rupee) is a central bank liability, distinct from UPI, which is a payment rail over commercial bank deposits.

RBI is the banking regulator; it licenses banks, sets prudential norms (CRR, SLR, capital adequacy), and supervises through inspection and audit.

Banking Regulation Act 1949 governs banking companies; RBI Act 1934 governs the central bank and scheduled banks.

Basel norms: capital adequacy is measured as capital divided by risk-weighted assets; Basel III introduced leverage ratio and liquidity coverage ratio.

AML/CFT: banks must file suspicious transaction reports (STR) and cash transaction reports (CTR) with FIU-IND; failure attracts penalties.

Insider trading is prohibited under SEBI regulations: trading on unpublished price-sensitive information is an offence.

Code of conduct for bank employees: confidentiality of customer data, no acceptance of gifts that could influence decisions, no personal benefit from official position.

Consumer Protection Act 2019 covers unfair trade practices and misleading advertisements, including in financial services.

Whistle-blower protection: an employee reporting a genuine irregularity in good faith is protected from retaliation.

Communication process: sender, message, channel, receiver, feedback; noise is any interference that distorts the message.

Active listening: paying full attention, not interrupting, paraphrasing to confirm understanding, and asking clarifying questions.

Resume essentials: contact details, objective, education, skills, and experience; keep it to one or two pages and tailor it to the role.

Interview preparation: research the employer, prepare examples using the STAR method (Situation, Task, Action, Result), and prepare questions to ask.

Teamwork roles: leader, facilitator, contributor, and challenger; effective teams need clear goals, defined roles, and open communication.

Entrepreneurship: an entrepreneur identifies an opportunity, mobilises resources, bears risk, and earns profit; a business plan covers market, operations, finance and risk.

Break-even point = fixed costs divided by (selling price per unit minus variable cost per unit).

MSME registration and schemes such as MUDRA loans support small businesses; GST registration is required above the prescribed turnover threshold.