CHSE Odisha Vocational BFSI (BC/BF) flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Scheduled commercial bank

A bank included in the Second Schedule of the RBI Act, 1934, having satisfied minimum paid-up capital and reserve requirements and thus eligible for RBI facilities.

Credit creation multiplier

The ratio of new deposits created by the banking system to the initial deposit; in a simple model it equals one divided by the reserve ratio.

NBFC

A non-banking financial company that lends or invests but cannot accept demand deposits and is not part of the payment and settlement system.

PMJDY

Pradhan Mantri Jan Dhan Yojana, launched in 2014, provides basic savings accounts with RuPay cards, accident cover, and an overdraft facility for financial inclusion.

Demand deposit

A deposit repayable on demand, such as savings or current account balance, withdrawable by cheque, ATM, or electronic transfer without prior notice.

Stale cheque

A cheque presented for payment more than three months after its date of issue; banks return it unpaid unless validity is extended in writing.

Crossed cheque

A cheque bearing two parallel lines, indicating it must be collected through a bank account and cannot be paid in cash across the counter.

Garnishee order

A court order attaching a customer's deposit held with a bank, requiring the bank to freeze and remit the specified amount to the decree holder.

RTGS

Real Time Gross Settlement, an RBI-operated system settling high-value interbank payments individually and in real time, generally for amounts of two lakh rupees and above.

Insurable interest

A financial stake in the subject matter of insurance such that the insured benefits from its survival and suffers loss from its damage or destruction.

Subrogation

The insurer's right, after paying a claim, to step into the insured's shoes and recover the loss from the party responsible.

ULIP

Unit Linked Insurance Plan, a life insurance product combining risk cover with market-linked investment; the fund value fluctuates with underlying asset values.

IRDAI

Insurance Regulatory and Development Authority of India, established under the IRDA Act, 1999, licensing insurers and intermediaries and protecting policyholders.

Reinsurance

Insurance purchased by an insurer to transfer part of its risk to a reinsurer, limiting the primary insurer's exposure to large or catastrophic claims.

Treasury bill

A short-term money market instrument issued by the government at a discount and redeemed at face value, with maturity of 91, 182, or 364 days.

Primary market

The segment where new securities are issued to investors for the first time, as in an initial public offering or a rights issue.

NAV

Net Asset Value, calculated as total assets minus total liabilities divided by units outstanding; it is the per-unit value of a mutual fund scheme.

SEBI

Securities and Exchange Board of India, established under the SEBI Act, 1992, regulating stock exchanges, intermediaries, and investor protection in securities markets.

Option versus future

An option gives the buyer a right, not an obligation, to buy or sell an underlying; a futures contract obliges both parties to settle at the agreed price.

Accounting equation

Assets equal liabilities plus owner's equity; every transaction keeps this equation balanced through double-entry recording.

Current ratio

Current assets divided by current liabilities; it measures short-term liquidity and the ability to meet obligations falling due within a year.

Bank reconciliation statement

A statement reconciling the cash book balance with the bank passbook balance, explaining timing differences, bank charges, and errors.

Depreciation

The systematic allocation of the cost of a fixed asset over its useful life, reflecting wear, tear, and obsolescence in the accounts.

RBI Ombudsman

An RBI-appointed authority under the integrated Ombudsman Scheme, 2021, that resolves eligible customer complaints against banks and payment system participants.

Active listening

A communication technique of giving full attention, paraphrasing the speaker's message, and confirming understanding before responding.

Seven Cs of communication

Clarity, conciseness, concreteness, correctness, coherence, completeness, and courtesy; criteria for effective business writing and speech.

Cash Reserve Ratio

The percentage of net demand and time liabilities that a bank must maintain as cash balance with the Reserve Bank of India.

Priority sector lending

RBI-mandated lending targets, generally 40 percent of adjusted net bank credit for domestic scheduled commercial banks, to agriculture, micro enterprises, and weaker sections.

FEMA, 1999

The Foreign Exchange Management Act regulates foreign exchange transactions in India, replacing FERA and administered through authorised dealer banks under RBI.

UPI

Unified Payments Interface, a NPCI-operated real-time payment system using a virtual payment address to transfer funds instantly between bank accounts.

Phishing

A social engineering attack using fraudulent emails or messages that impersonate a bank to trick a customer into revealing passwords, PINs, or OTPs.

Break-even point

The sales volume at which total revenue equals total cost; in units it equals fixed costs divided by contribution per unit.