JAIIB IE&IFS flashcards

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

GDP deflator

Ratio of nominal GDP to real GDP multiplied by 100. It measures the price level of all domestically produced final goods and services, unlike CPI which covers a fixed consumer basket.

Repo rate

The policy rate at which the RBI lends short-term funds to banks against government securities under the Liquidity Adjustment Facility. It is the primary instrument of monetary policy transmission.

CRR

Cash Reserve Ratio is the share of net demand and time liabilities that banks must hold as cash with the RBI. It earns no interest and directly affects the money multiplier.

Fiscal deficit

Total expenditure minus total receipts excluding borrowings. It measures the government's borrowing requirement and is the headline fiscal indicator in India's Union Budget.

Revenue deficit

Revenue expenditure minus revenue receipts. A positive revenue deficit means the government borrows to fund consumption rather than asset creation, signalling fiscal weakness.

Primary deficit

Fiscal deficit minus interest payments. It isolates the current year's fiscal stance by stripping out the burden of past borrowing, showing fresh borrowing needs.

CPI inflation

Consumer Price Index inflation measures retail price changes in a fixed basket compiled by NSO. It is the RBI's target variable under flexible inflation targeting at 4% ±2%.

WPI

Wholesale Price Index tracks price changes at the wholesale level across primary articles, fuel and manufactured products. It excludes services and has base year 2011-12.

Current account deficit

Excess of payments on merchandise trade, services, income and transfers over receipts. A CAD must be financed by capital inflows or reserve drawdown.

Money multiplier

Ratio of broad money to reserve money, approximated as 1 divided by the reserve ratio. It shows how bank credit expands a given base of central bank money.

M3 broad money

M3 equals M1 plus time deposits with the banking system. It is the broadest standard monetary aggregate used by the RBI to assess liquidity conditions.

Inflation targeting framework

Statutory arrangement since 2016 where the RBI pursues a 4% CPI target within a 2% band. The Monetary Policy Committee sets rates; failure triggers a report to government.

PLI scheme

Production Linked Incentive scheme gives output-linked subsidies to manufacturers in 14 sectors. It aims to boost domestic manufacturing, exports and import substitution.

GST structure

Destination-based indirect tax on supply of goods and services with CGST, SGST and IGST components. GST Council recommends rates; petroleum and alcohol remain outside.

Repo corridor

The LAF corridor bounded by the MSF rate as ceiling and the SDF rate as floor, with repo as the policy rate near the middle. It guides overnight money market rates.

Scheduled bank status

A bank listed in the Second Schedule of the RBI Act, 1934, meeting minimum capital and reserve requirements. Scheduled banks access RBI refinance and clearing facilities.

Priority sector lending

Mandate requiring domestic scheduled commercial banks to lend 40% of adjusted net bank credit to agriculture, MSMEs, housing, education and weaker sections.

Basel III capital buffers

Minimum CET1 of 5.5%, Tier 1 of 7% and total capital of 9% in India, plus a 2.5% capital conservation buffer. It strengthens loss absorption capacity.

LCR

Liquidity Coverage Ratio requires banks to hold high-quality liquid assets sufficient to cover 30 days of net cash outflows under stress. It addresses short-term liquidity risk.

NSFR

Net Stable Funding Ratio requires available stable funding to exceed required stable funding over a one-year horizon. It limits over-reliance on short-term wholesale funding.

RTGS

Real Time Gross Settlement settles high-value payments individually and continuously, with no upper limit. It is operated by the RBI and used for large interbank transfers.

NEFT

National Electronic Funds Transfer is a deferred net settlement system that clears retail payments in half-hourly batches. It operates 24x7 and has no minimum amount.

UPI

Unified Payments Interface is a real-time retail payment system built on IMPS by NPCI. It enables instant account-to-account transfers using virtual payment addresses.

Treasury bills

Short-term zero-coupon money market instruments issued at a discount by the Government of India. Tenors are 91, 182 and 364 days; they are issued by RBI on behalf of government.

Commercial paper

Unsecured promissory note issued by corporates with minimum tenor of 91 days, sold at a discount. It provides short-term funding alternatives to bank borrowing.

Certificate of deposit

Negotiable money market instrument issued by banks and select financial institutions, with maturity of at least 7 days. It is a short-term liability of the issuer.

DICGC deposit insurance

Deposit Insurance and Credit Guarantee Corporation insures each depositor up to ₹5 lakh per bank. It covers commercial banks, RRBs and co-operative banks.

SEBI mandate

Securities and Exchange Board of India protects investors, develops and regulates the securities market. It oversees stock exchanges, mutual funds, brokers and listed companies.

NBFC regulation

Non-banking financial companies are regulated by the RBI under the RBI Act, 1934. They can lend but cannot accept demand deposits or issue cheques.

Monetary Policy Committee

Six-member committee chaired by the RBI Governor that sets the repo rate to achieve the 4% inflation target. It meets at least four times a year.

Open market operations

Purchase or sale of government securities by the RBI to inject or absorb durable liquidity. OMOs are distinct from the short-term repo operations.

TREPS

Tri-party Repo is a money market instrument where a third-party clearing house manages collateral. It facilitates collateralised borrowing and lending among market participants.