CHSE Odisha Vocational BFSI (BC/BF) key terms

A mandatory process by which a bank verifies a customer's identity, address and source of funds before opening an account or allowing certain transactions, helping to prevent fraud, money laundering and terrorist financing.

Laws, rules and internal procedures that financial institutions follow to detect and report attempts to disguise the origin of illegally obtained money, including monitoring transactions and filing reports with authorities.

A confidential report a bank files with the financial intelligence unit when a transaction appears unusual or has no clear economic purpose, so that authorities can investigate possible criminal activity.

The ongoing process of collecting and updating information about a customer, understanding the purpose of their account activity, and assessing risk so the bank knows who it is really dealing with.

The interest rate at which the central bank lends short-term funds to commercial banks against government securities, used as a main tool to control inflation and money supply in the economy.

The share of a bank's total deposits that must be kept as cash with the central bank, reducing the funds available for lending and thereby influencing credit growth and liquidity.

The minimum percentage of deposits a bank must hold in safe liquid assets such as government securities, cash or gold, ensuring the bank can meet obligations and supporting government borrowing.

A short-term money market instrument issued by the government at a discount and redeemed at face value on maturity, used to raise funds temporarily and treated as a very safe investment.

An unsecured short-term promissory note issued by large, creditworthy companies to raise working capital, usually for periods under one year, and traded in the money market.

The segment of the financial system where short-term instruments with maturities of up to one year, such as Treasury bills and call money, are bought and sold by institutions.

The part of the financial system that deals in long-term securities such as shares and debentures, channelling savings into companies and governments for investment over several years.

A long-term debt instrument issued by a company that pays fixed interest and is repaid on a stated date, with holders ranking as creditors rather than owners of the business.

A pooled investment vehicle that collects money from many investors and invests it in a diversified portfolio of shares, bonds or other assets, managed professionally for a fee.

The market value of a mutual fund scheme's total assets minus its liabilities, divided by the number of units outstanding, showing the value of one unit on a given day.

The amount a policyholder pays to an insurer, either as a lump sum or in instalments, in exchange for the insurance cover provided under the policy.

The maximum amount the insurer agrees to pay on the occurrence of the insured event under a life insurance policy, as stated in the policy schedule.

A policyholder's written instruction naming a person who will receive the insurance benefit if the policyholder dies, ensuring the claim is settled without delay.

The person or entity that owns an insurance policy, pays the premium and holds the contractual rights under it, who may or may not be the person whose life is insured.

The amount the insured must bear from a loss before the insurer pays anything, used in general insurance to reduce small claims and keep premiums lower.

The process by which an insurer examines a claim, verifies the loss against policy terms and pays the admissible amount to the insured or beneficiary.

An accounting method where every transaction is recorded in at least two accounts, one debited and one credited, so that total debits always equal total credits.

The principal book of accounts in which transactions are posted account by account, showing the running balance of each asset, liability, income and expense head.

A statement listing the closing balances of all ledger accounts to check that total debits equal total credits before final accounts are prepared.

A financial statement showing a business's assets, liabilities and capital on a particular date, revealing what the firm owns, owes and the owners' stake.

The funds available for day-to-day operations, calculated as current assets minus current liabilities, indicating a firm's short-term liquidity and ability to pay its bills.

A report classifying cash received and paid during a period into operating, investing and financing activities, showing how cash balances changed and whether the business generates cash.

An account a domestic bank holds with a correspondent bank in a foreign country, usually in that country's currency, used to settle international transactions and payments.

An account held by a foreign correspondent bank with a local bank in the local currency, helping the foreign bank serve customers who transact in that country.

A written undertaking by a bank to pay a seller a stated amount on presentation of specified documents, used in trade to reduce the risk of non-payment.

A written order by one party directing another to pay a fixed sum to a named person on demand or at a future date, widely used in trade and bill discounting.

A clearing arrangement in which an image and data of a cheque are transmitted electronically between banks instead of moving the paper cheque, speeding up clearing and reducing fraud.

A real-time payment system that lets users transfer money between bank accounts instantly using a virtual payment address on a mobile application, without entering account details.

A technology service that securely authorises and processes online payments by encrypting card or account details and passing them between the merchant, customer and bank.

A security method requiring two independent proofs of identity, such as a password plus a one-time code sent to the customer's phone, before a transaction is allowed.

A fraudulent attempt to obtain sensitive information such as passwords or card numbers by impersonating a trusted organisation through fake emails, messages or websites.

The actions a business takes to make amends after a service failure, such as apologising, correcting the error and compensating the customer, in order to restore trust and loyalty.

A communication technique in which the listener gives full attention, avoids interrupting, and confirms understanding by paraphrasing and asking clarifying questions before responding.

The formal system through which a customer's complaint is received, recorded, investigated and resolved within a stated time, with escalation to higher authorities if unresolved.

An independent official appointed to examine complaints against banks or insurers and order fair remedies, providing customers with a low-cost alternative to going to court.

A written document describing a venture's product, target market, operations, costs and expected revenue, used to guide decisions and to persuade lenders or investors to provide funds.

The level of sales at which total revenue exactly covers total costs, so the business makes neither profit nor loss and any additional sales begin generating profit.