Haryana BSEH SS NSQF BFSI key terms

The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks against government securities. Changes in it influence borrowing costs, deposit rates, credit growth and overall inflation in the economy.

The rate at which the Reserve Bank of India absorbs surplus liquidity from banks by borrowing their funds. It generally sits below the repo rate and helps the central bank manage excess cash in the banking system.

The share of a bank's net demand and time liabilities that must be kept as cash balances with the Reserve Bank of India. It earns no interest and directly reduces the funds available for lending.

The minimum percentage of net demand and time liabilities a bank must hold in approved liquid assets such as government securities, cash or gold. It is maintained with the bank itself rather than with the central bank.

The set of actions taken by a central bank to control money supply, credit availability and interest rates in order to achieve price stability and support growth. In India it is announced by the Monetary Policy Committee.

The mandatory process by which a bank verifies the identity, address and risk profile of a customer before opening an account or allowing transactions. It is a key defence against money laundering and terrorist financing.

An RBI-operated retail funds transfer system in which transactions are settled in batches at fixed intervals throughout the day. It can be used for any amount and works through bank branches and digital channels.

A funds transfer system where each transaction is settled individually and immediately, without netting against other payments. It is used mainly for high-value transfers and generally requires a minimum transaction amount.

A 24x7 interbank electronic funds transfer service available through mobile banking, internet banking and ATMs. It allows instant transfers of modest amounts and operates even on holidays and outside normal banking hours.

A real-time payment system built on the Immediate Payment Service that lets users link bank accounts to a virtual handle and transfer money using a smartphone. It supports person-to-person and merchant payments through a single app.

A loan or advance on which interest or principal has remained overdue for more than 90 days, causing the bank to classify it as impaired. Banks must make provisions against such assets, which reduces profitability.

An asset pledged by a borrower to secure a loan, which the lender may sell if the borrower defaults. Common examples are property, gold, fixed deposits and vehicles, and it reduces the lender's credit risk.

Current Account and Savings Account balances held with a bank. These deposits usually pay low or no interest, so they give the bank a cheap and stable source of funds and improve its net interest margin.

A sum placed with a bank for a fixed term at a pre-agreed interest rate, generally with penalties for early withdrawal. It is treated as a relatively safe savings product and can also serve as loan collateral.

The difference between the interest income a bank earns on loans and the interest it pays on deposits, expressed as a percentage of earning assets. It is a core measure of a bank's lending profitability.

The amount a bank sets aside from its profits to cover expected losses on doubtful loans and other assets. Higher provisions reduce reported profit and are required by regulators once an account turns into an NPA.

A measure of a bank's capital expressed as a percentage of its risk-weighted assets. It shows how much cushion the bank has to absorb losses and must stay above the minimum set by the regulator.

The possibility that a borrower will fail to repay principal or interest on time, causing a loss to the lender. Banks assess it through credit appraisal, collateral, credit scores and periodic monitoring of accounts.

A numerical summary of a person's borrowing and repayment history, used by lenders to judge creditworthiness. In India scores are issued by credit information companies such as CIBIL and TransUnion.

A pooled investment vehicle that collects money from many investors and invests it in shares, bonds or other securities according to a stated objective. Units are priced by net asset value and managed by a professional asset manager.

The value of one unit of a mutual fund, calculated by subtracting the scheme's liabilities from its total assets and dividing by the number of units outstanding. It is normally declared once each business day.

A facility through which an investor puts a fixed amount into a mutual fund scheme at regular intervals, such as monthly. It averages out purchase cost over time and encourages disciplined, long-term investing.

The Securities and Exchange Board of India, the statutory regulator of the securities market. It oversees stock exchanges, brokers, mutual funds, portfolio managers and investor protection measures in India.

An account that holds shares and other securities in electronic form instead of paper certificates. It is opened with a depository participant and is needed to buy, sell and hold listed securities electronically.

The segment of the capital market where new securities are issued and sold for the first time, for example through an initial public offering. The issuing company receives the funds raised in this market.

The market where already-issued securities are bought and sold between investors, such as on a stock exchange. The issuing company does not receive money from these trades, but liquidity and price discovery are provided.

The risk of loss arising from movements in market prices such as share prices, interest rates, exchange rates or commodity prices. It affects investors holding securities and cannot be removed by diversification alone.

Spreading investments across different assets, sectors or regions so that a loss in one holding is offset by gains elsewhere. It reduces unsystematic risk but does not remove overall market risk.

The amount a policyholder pays to an insurer, in a lump sum or instalments, in exchange for insurance cover. It is calculated from factors such as age, sum insured, risk profile and policy term.

The amount stated in an insurance policy that the insurer agrees to pay on the occurrence of the insured event, such as death or maturity. It forms the basis for calculating many premiums and claim payouts.

The process by which an insurer assesses the risk presented by a proposal and decides whether to accept it, on what terms and at what premium. It may involve medical tests, documents and exclusions.

The principle that both the insured and the insurer must disclose all material facts honestly and completely when entering an insurance contract. Concealment or misstatement can allow the insurer to avoid the policy.

A financial or legal relationship in which a person benefits from the continued existence of the insured subject and suffers loss if it is damaged. It must exist at the time of taking the policy and, in life insurance, at claim time.

A formal request by a policyholder or nominee for payment of the benefits due under an insurance policy after an insured event occurs. The insurer verifies documents and policy conditions before settling or rejecting it.

A facility by which an account holder or policyholder names a person to receive the balance or benefits in the event of death. The nominee acts as a trustee for the legal heirs unless also named as beneficiary.

The set of laws, rules and procedures that financial institutions follow to prevent criminals from disguising the proceeds of crime as legitimate money. It includes customer screening, transaction monitoring and reporting suspicious activity.

The ongoing process of identifying customers, verifying their documents and understanding their business and transaction patterns. Its intensity is increased for higher-risk customers under a risk-based approach.

The natural person who ultimately owns or controls an account, company or legal arrangement, even if the account is held in another name. Identifying such persons is a key requirement of anti-money-laundering rules.

An independent official who examines and decides customer complaints against a bank or insurer after the institution's own grievance process fails. In India the RBI runs an integrated scheme for banks and non-bank payment issuers.

The formal system through which a financial institution receives, records and resolves customer complaints within set timelines. It typically starts with the branch or call centre and can escalate to the regulator's ombudsman.

The process by which interest is added to the principal so that future interest is earned on interest as well. Over long periods it produces growth far larger than simple interest on the same amount.

A sustained rise in the general level of prices of goods and services, which reduces the purchasing power of money over time. It is measured through indices such as CPI and is a key target of monetary policy.

The ease with which an asset can be converted into cash quickly without significantly affecting its price. Banks must balance liquidity needs against the higher returns earned on less liquid assets.

The market for short-term borrowing and lending of funds, generally for periods up to one year. Instruments include treasury bills, commercial paper, certificates of deposit and call money.

Debt instruments issued by the central or state government to borrow money, usually paying a fixed rate of interest. They are considered low-risk and are widely held by banks to meet statutory liquidity requirements.

The final step in a transaction in which funds or securities are actually transferred between the parties and the obligation is discharged. Delays or failures in settlement create credit and liquidity risk.

A prepaid instrument stored electronically, often on a mobile app, from which a user can make payments or transfer money. In India non-bank wallets are issued under RBI rules and require minimum KYC verification.

The use of a mobile phone application or SMS to access a bank account for balance checks, transfers, bill payments and other services. It requires registration and is protected by PINs, passwords and device binding.

An agent appointed by a bank to provide basic banking services such as deposits, withdrawals and account opening in areas without a branch. The model extends financial inclusion to remote and rural locations.

The effort to ensure that all sections of society, including low-income and rural households, have access to affordable and useful financial services. It is promoted through no-frills accounts, business correspondents and direct benefit transfers.

The process of identifying an opportunity, arranging resources and taking calculated risks to start and grow a business venture. It involves innovation, planning, market research and managing finance and people.

A written document that describes a venture's objectives, target market, products, operations, marketing strategy and financial projections. It is used to guide the entrepreneur and to convince lenders or investors to fund the venture.

The funds needed to finance day-to-day operations such as buying stock, paying wages and covering expenses before sales revenue arrives. It is often financed through bank cash credit or overdraft facilities.