CHSE Odisha Vocational BFSI (BC/BF) cheat sheet

A bank accepts demand deposits repayable on demand and uses them to make loans; the spread between lending and deposit rates is the core income source.

Scheduled commercial banks in India are those included in the Second Schedule of the RBI Act, 1934; they must satisfy minimum paid-up capital and reserve conditions.

Primary functions of a bank: accepting deposits, lending, and creating credit; secondary functions: agency services (payments, collections) and general utility services (lockers, drafts).

Types of deposits: savings (interest-bearing, withdrawal limits), current (no interest, meant for businesses), fixed/term (fixed period, higher rate), and recurring (periodic fixed instalments).

Credit creation multiplier = 1 / reserve ratio; with a 10% cash reserve ratio, an initial deposit can expand money supply up to ten times in the simplified model.

NBFCs lend and invest but cannot accept demand deposits and are not part of the payment/settlement system; they are regulated by RBI under the RBI Act, 1934, Chapter IIIB.

Cooperative banks are registered under State or Central Cooperative Societies Acts and are governed by the Banking Regulation Act, 1949 (AACS) for banking functions.

Financial inclusion means access to affordable financial services; PMJDY (2014) is a flagship scheme providing basic savings accounts with RuPay cards and overdraft facility.

KYC requires identity and address verification; for individuals, officially valid documents include Aadhaar, passport, driving licence, PAN, and MGNREGA job card.

A cheque is valid for three months from the date of issue; after that it is a stale cheque and is returned unpaid.

Crossing a cheque (two parallel lines) means it must be collected through a bank account and cannot be paid in cash over the counter.

A demand draft is prepaid and cannot be dishonoured for insufficient funds; a cheque can be dishonoured for insufficient funds.

NEFT settles in batches (half-hourly slots), RTGS settles in real time and is for transactions of Rs 2 lakh and above, and IMPS is available 24x7 through mobile channels.

Nomination on a deposit account allows the nominee to receive the balance on the depositor's death, avoiding probate for small balances.

Garnishee order is an order from a court attaching a customer's deposit with the bank; the bank must freeze and remit the attached amount as directed.

A lien is the bank's right to retain a customer's property or deposit until a debt is satisfied; banker's lien applies to goods/ securities held in the ordinary course of banking.

Insurance transfers risk from the insured to the insurer in return for a premium; insurable interest, utmost good faith, indemnity, contribution, subrogation, and proximate cause are the core principles.

Life insurance pays a sum assured on death or maturity; general insurance covers property, liability, health, and marine risks.

In life insurance, the premium depends on age, sum assured, policy term, and mortality assumptions; younger age generally means lower premium.

IRDAI is the insurance regulator established under the IRDA Act, 1999; it licenses insurers, agents, and intermediaries and protects policyholders.

ULIPs combine investment and insurance; the investment portion is in market-linked funds and carries market risk, unlike traditional endowment policies.

A policy lapse occurs when premiums are unpaid beyond the grace period; revival (reinstatement) requires payment of arrears and may require fresh medical evidence.

Reinsurance is insurance for insurers; the primary insurer cedes part of the risk to a reinsurer to limit exposure.

Third-party motor insurance is mandatory in India; own-damage cover is optional and covers damage to the insured vehicle.

Money market deals in instruments of maturity up to one year (treasury bills, commercial paper, certificates of deposit, call money); capital market deals in long-term instruments (equity, bonds).

Primary market is where new securities are issued (IPO, FPO, rights issue); secondary market is where existing securities are traded on exchanges.

SEBI regulates the securities market under the SEBI Act, 1992; RBI regulates money market and government securities market segments.

Treasury bills are issued at a discount and redeemed at face value; the difference is the investor's return.

A bond's price moves inversely to interest rates; when yields rise, existing bond prices fall.

Sensex (BSE) and Nifty 50 (NSE) are benchmark equity indices; they are computed using free-float market capitalisation methodology.

Mutual fund NAV = (total assets minus total liabilities) / number of units outstanding; NAV is declared daily for open-ended schemes.

Derivatives (futures, options, swaps) derive value from an underlying asset; options give a right but not an obligation, futures create an obligation.

Accounting equation: Assets = Liabilities + Owner's Equity; every transaction affects at least two accounts (double-entry).

Golden rules: debit the receiver and credit the giver (personal accounts); debit what comes in and credit what goes out (real accounts); debit expenses/losses and credit incomes/gains (nominal accounts).

Trial balance lists debit and credit balances; it must total equal, but equality does not guarantee absence of errors of principle.

Balance sheet shows financial position at a point in time; profit and loss account shows performance over a period.

Current ratio = current assets / current liabilities; a ratio near 2:1 is conventionally considered comfortable for many businesses.

Return on assets = net profit / total assets; return on equity = net profit / shareholders' equity.

Depreciation allocates the cost of a fixed asset over its useful life; straight-line method charges an equal amount each year.

Bank reconciliation statement reconciles the cash book balance with the passbook balance, explaining cheques issued but not presented, deposits not yet credited, and bank charges.

Service quality dimensions commonly cited: reliability, responsiveness, assurance, empathy, and tangibles; reliability is usually rated the most important by customers.

Grievance redressal: a complaint must first be raised with the bank, then escalated to the RBI Ombudsman scheme if unresolved within the prescribed period.

Active listening means attending fully, paraphrasing, and confirming understanding rather than preparing a reply while the customer speaks.

In written communication, the 7 Cs are clarity, conciseness, concreteness, correctness, coherence, completeness, and courtesy.

Email etiquette: a specific subject line, formal salutation, one clear purpose, and a professional signature block.

Communication barrier types: physical/noise, semantic (jargon, ambiguity), psychological (prejudice, distrust), and organisational (hierarchy, filtering).

Customer lifetime value = average purchase value x purchase frequency x customer lifespan; it justifies spending on retention.

A service recovery framework: acknowledge the problem, apologise sincerely, act to fix it, and follow up to confirm resolution.

RBI is India's central bank, established under the RBI Act, 1934; it conducts monetary policy, issues currency, and regulates banks and payment systems.

Banking Regulation Act, 1949 governs banking business: licensing, capital, management, and restrictions on loans to directors.

Cash Reserve Ratio is the share of net demand and time liabilities held as cash with RBI; Statutory Liquidity Ratio is held in approved securities with the bank itself.

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

PMJDY, PMSBY (accident cover), and PMJJBY (life cover) are the three social security schemes launched in 2014-15 for financial inclusion.

Prevention of Money Laundering Act, 2002 requires reporting entities to maintain KYC records, report suspicious transactions, and appoint a principal officer.

FEMA, 1999 governs foreign exchange transactions in India and replaced FERA; RBI administers it through authorised dealer banks.

Banking Ombudsman Scheme (integrated scheme, 2021) covers complaints against banks and non-bank payment system participants, with defined monetary limits.

UPI is a real-time payment system built on IMPS infrastructure by NPCI; it uses a virtual payment address (VPA) instead of account details.

Aadhaar Enabled Payment System (AePS) allows basic banking using Aadhaar number and biometric authentication at a business correspondent point.

Unified Payments Interface transactions are settled instantly; chargebacks and disputes are handled through the NPCI dispute resolution mechanism.

Phishing, vishing, and smishing are social engineering attacks through email, voice call, and SMS respectively; banks never ask for OTP or PIN over a call.

POS terminal with EMV chip and PIN is more secure than magnetic stripe; contactless cards use NFC and have transaction limits.

Aadhaar e-KYC and video KYC are permitted methods of customer identification under RBI's KYC Master Direction, subject to conditions.

Digital Signature Certificate uses public key infrastructure; the private key signs, the public key verifies, and a Certifying Authority issues the certificate.

Fintech categories include payments, lending, wealth management, insurtech, and regtech; an API enables secure data exchange between banks and third-party apps.

A business plan components: executive summary, market analysis, operations plan, marketing plan, management team, and financial projections.

Break-even point in units = fixed costs / (selling price per unit - variable cost per unit).

Working capital = current assets - current liabilities; it funds day-to-day operations and is distinct from fixed capital.

Sources of finance: equity (ownership, no repayment), debt (interest, repayment), and grants/subsidies; MSME schemes include MUDRA loans (Shishu, Kishor, Tarun categories).

GST registration thresholds: Rs 40 lakh turnover for goods and Rs 20 lakh for services (higher in special category states).

Employability skills: communication, teamwork, problem solving, digital literacy, and time management; a CV should list measurable achievements, not duties.

SWOT analysis maps internal strengths and weaknesses against external opportunities and threats.

A sole proprietorship is owned by one person with unlimited liability; a private limited company has limited liability and separate legal identity.

A project report structure: title page, certificate, declaration, acknowledgements, objectives, methodology, findings, conclusions, and bibliography.

Viva preparation: be able to justify the choice of topic, describe the data collection method, and explain the key findings in plain language.

Common banking practical tasks: filling a deposit slip, writing a cheque, preparing a demand draft application, and reading a passbook entry.

A sample survey questionnaire should have a clear purpose, avoid leading questions, and include a mix of closed and open questions.

Data presentation in projects: tables for precision, bar charts for comparison, line graphs for trends, pie charts for proportions.

Plagiarism means presenting another's work as one's own; a project must cite sources and acknowledge assistance.

Field visit observation should record date, place, branch/business name, and the process observed, and distinguish observation from inference.

A viva examiner typically probes definitions, rationale, limitations, and practical application; stating limitations honestly is expected, not penalised.